Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — TRANSPORT

Heavy Lorries

Mr. Dykes: asked the Secretary of State for Transport what new measures are being examined by his Department following the publication of the Armitage report to reduce the effects on road surfaces of heavy lorries.

Mr. Spearing: asked the Secretary of State for Transport when, and if, he expects to make an announcement concerning axle weights for heavy load vehicles.

The Secretary of State for Transport (Mr. Norman Fowler): I intend to make a statement covering all the main recommendations of the Armitage report as soon as the Government have reached decisions. However, as I announced in the debate on 17 June, we have decided that a 44-tonne lorry would not be appropriate for this country.

Mr. Dykes: I thank my right hon. Friend for that answer, especially the latter part of it. Serious damage is being caused to road surfaces—not only motorways but other roads, including urban roads such as those in my constituency and in the borough of Harrow—and that is a strong reason for delaying an increase in lorry weights until, given sufficiently long-term programmes of reconstruction and reinforcement, those roads can be strengthened to stop further serious depredation.

Mr. Fowler: I will take into account what my hon. Friend said. He will recognise that industry has a contrary view to his. An option already open under my hon. Friend's Act has meant that about 400 schemes have been designed to enable local authorities to deal with the problem of lorries and they have now been put into effect.

Mr. Spearing: Does the Minister acknowledge that the problem is not only weight and its distribution on axles but speed and the effect of braking on road surfaces and on adjacent buildings? Can he assure the House that when he decides about maximum axle weights he will present fully-documented evidence so that the House can measure his conclusions against scientific evidence?

Mr. Fowler: We try to provide as much information as we can. If a proposal were made to increase lorry weights that would have to be debated in the House.

Sir Anthony Royle: Is my hon. Friend aware that on two occasions in my constituency main roads have collapsed into old drains below them due to the weight of

and damage caused by heavy lorries? Will he give a firm assurance that he will at no time in the future permit heavier lorries to travel on our roads, especially on our urban roads?

Mr. Fowler: I cannot give the assurance that my hon. Friend requests as that is clearly one of the matters that we are considering at present. I pay tribute to the work that my hon. Friend has done on the problems in his constituency. If there is anything that we can do to help we shall seek to do so.

A564 (Stoke—Derby Link)

Mr. Knox: asked the Secretary of State for Transport whether he is satisfied with the progress of the preparatory work for the Blythe Bridge to Uttoxeter section of he A564 Stoke to Derby link.

The Under-Secretary of State for Transport (Mr. Kenneth Clarke): Yes, Sir. A public inquiry into the proposals for the compulsory acquisition of land opens next week.

Mr. Knox: Is my hon. and learned Friend aware that my constituents in Draycott, Tean and Checkley will be pleased to hear that the work is on schedule? Is he aware that they would be even more pleased to hear that it was ahead of schedule? Can he give me any idea when the construction work on that section of the road will start?

Mr. Clarke: I do not want to tempt fate, but we have made better progress on that road scheme than on almost any other programme in the past two years. I am aware that my hon. Friend and his constituents would like the progress to be fast. At the moment we are aiming for a starting date early in 1983.

British Railways (Manpower)

Mr. Stan Thorne: asked the Secretary of State for Transport whether he has discussed with the chairman of the British Railways Board the future manpower requirements of British Railways.

Mr. Fowler: Yes, Sir. Neither of us is in any doubt that the future of the industry and of employment in it depend on securing the maximum efficiency and productivity.

Mr. Thorne: Can the Minister guarantee that those who lose their jobs arising from electrification or proposed productivity agreements will be provided with alternative work within the industry?

Mr. Fowler: I cannot give such a guarantee, but that is one of the factors that the chairman and the board of British Rail will take into account. I am sure that the hon. Gentleman will agree that improvements in productivity inside British Rail are the best guarantees for the future of the industry and therefore for those working in it.

Mr. Michael McNair-Wilson: Did my right hon. Friend see a recent statement by Sir Peter Parker that British Rail had lost £15 million of freight business because it was required to carry guards on freight trains, although those guards no longer have a useful function'? Is that not a typical example of overmanning which makes it so difficult for British Rail to be profitable?

Mr. Fowler: Yes, Sir. My hon. Friend has put his finger on a real issue. The speech by the chairman of


British Rail at the NUR conference yesterday pointed out that if the two or two-and-a-half men on average on each freight train shift came down to only one we should make real progress in productivity and, incidentally, in securing the future of rail freight.

Mr. Prescott: The Secretary of State will be aware of the Leeds university study comparing European rail systems, which showed that the British Rail worker worked longer hours for lower pay and yet maintained a higher level of productivity. Even the Monopolies and Mergers Commission report on railways in the South-East showed that productivity had increased between 1960 and 1975 by almost 95 per cent. Is not it about time that the right hon. Gentleman stood up to the Prime Minister and got the proper resources and investment for the industry, as other European Ministers have done, instead of whining about his problems and blaming workers?

Mr. Fowler: I should should remind the House that the resources going to British Rail in terms of its external finance limit for this year are £920 million.

Mr. Prescott: Not enough.

Mr. Fowler: Of course, the hon. Member for Kingston upon Hull, East (Mr. Prescott) is one of the big spenders in respect of railways policy. But an improvement in productivity is an issue on which I feel strongly. It is one on which the chairman of British Rail feels strongly.
The hon. Gentleman referred to European comparisons. In terms of freight crew, British Rail needs 185 staff per million train kilometers compared with Germany's figure of only 101, Sweden's, Belgium's and France's, of only 70, and Holland's 58. That shows the scope for improvement.

British Railways (Operating Costs)

Mr. McCrindle: asked the Secretary of State for Transport what percentage of British Railways' operating costs is represented by Government subsidies.

Mr. Fowler: In 1980, British Rail received £591 million from the Government in support payments and £57·8 million from PTEs. That represents 29 per cent. of rail operating expenditure.

Mr. McCrindle: On the relationship of the Government to British Rail, while I wholly welcome the electrification programme announced recently, is it not a fact that unless there is a substantial investment programme over the next 10 years to replace signalling and track, about 15 per cent. of British rail services, including especially the commuter services around London, will become unusable? Are these facts being taken into account in all the difficult negotiations which the Secretary of State is undertaking in relation to British Rail?

Mr. Fowler: Yes, Sir. They are being taken very much into account. Investment is one side, and we have shown already that some improvements can be made without extra investment. But I should like to see dealt with the investment needs about which my hon. Friend talks. However, I emphasise that we must deal with the problems of productivity and efficiency as well.

Mr. Dobson: Since the right hon. Gentleman is so smart at quoting European comparisons, will he give us comparisons on operating subsidies between British Rail and the French and German railways?

Mr. Fowler: There is no doubt that the operating subsidies in both France and Germany are greater than they are here. However, it is up to the Opposition Front Bench to say whether it thinks that that is a policy which is worth pursuing.

Mr. Prescott: Yes.

Mr. Fowler: The way that I put it is that the British taxpayer has a more cost-effective deal from the railways than is the case in either of those two countries.

Mr. Adley: Will not my right hon. Friend accept that it is a significant statistic that British Rail covers a far higher proportion of its operating costs with fares than do other European railways? Does not he agree that quoting statistics, as he did in reply to the last question, takes no account of the enormous density of traffic on our commuter and suburban routes, compared, for instance, with Switzerland? Can my right hon. Friend say when anyone asked him to provide a statistic showing how much subsidy or profit the M4 or the M6 motorways made last year?

Mr. Fowler: My hon. Friend would do well to listen to my answers. I was answering a question on freight services, not commuter services. I might also point out to my hon. Friend when, by implication, he criticises what I say about the efficiency and productivity of British Rail, that I am echoing what the chairman and board of British Rail are saying.

Mr. Newens: Is it not fair to recognise that a great deal of public money is going into road communications as well as into the railways and that when people criticise developments on the railways they could equally criticise investment in roads? If we are to have a decent system of communications we need a great deal more investment in our railways for commuter services and many other purposes, as well as in roads.

Mr. Fowler: I reminded the House just now that the external finance limit for British Rail this year is £920 million. That is a substantial sum. It must be pointed out that over the last decade road investment has been virtually halved, and that that was done by the last Government.

Commercial Vehicles (Accidents)

Mr. Sheerman: asked the Secretary of State for Transport if he will take steps to reduce the high percentage of accidents involving commercial vehicles.

Mr. Kenneth Clarke: The safety record of commercial vehicles has improved dramatically over the last 20 years. But accident rates are still too high. We shall continue to seek improvements by setting better standards for vehicle construction, regular vehicle checks and controls over vehicle operators and drivers.

Mr. Sheerman: Is the Minister aware that heavy goods vehicles make up 3·1 per cent. of all vehicles, 7·7 per cent. of total kilometres travelled, but 10·8 per cent. of accidents involving fatalities? Are not those figures disturbing? What are the Government doing to bring us into line with European recommendations on side underruns and in terms of improving the general safety of the design of lorries?

Mr. Clarke: Heavy lorries are involved in fewer accidents than cars, comparing mileages. They do 16 per


cent. of the mileage but are involved in only 10 per cent. of the accidents. However, when they are involved in accidents the accidents are more serious, hence the worrying number of fatalities quoted by the hon. Gentleman. We are already consulting on regulations about rear underruns on lorries. We propose next year to go over to EEC standards on better braking for lorries, and we are looking very seriously at the case for side guards on lorries, together with a number of the other safety recommendations in the Armitage report.

Mr. Dykes: Is my hon. and learned Friend still worried about the problem discussed in the House last year of heavy lorries on motorways travelling in the middle lane at too high a speed and almost driving the motor cars in front of them off the track? This is a serious problem. Will my hon. and learned Friend look at it again and see what measures can be taken to deter reckless lorry drivers?

Mr. Clarke: We always do our best to try to improve driver behaviour in all kinds of vehicles on motorways. Lorries do a high proportion of their mileage on motorways, and to the extent that they can be kept on suitable roads a beneficial effect on accident rates is achieved. I shall bear in mind what my hon. Friend says and take every opportunity to bring home to people the need to drive safely and courteously on motorways.

Mr. John Home Robertson: Is the Minister aware of the alarming number of fatal accidents, including a recent one in my constituency, involving foreign commercial vehicles inadvertently driving on the wrong side of the road? Will he look into the problem and consider issuing stickers or notices at ports of entry to remind foreign drivers that, from their point of view, we drive on the wrong side of the road?

Mr. Clarke: Problems about driving on different sides of the road cut both ways. I have no doubt that there is a little concern on the other side of the Channel about some of our drivers when they go there. We put up warning signs near the ports to remind drivers, when they come off ships, on which side we drive. We also have safety checks on foreign lorries coming off the ferries to make sure that they are not overloaded, are in a safe condition, and are complying with our regulations.

National Bus Company

Mr. Dobson: asked the Secretary of State for Transport what assessment he has made of the effects on the vehicle mileage run by the National Bus Company as stage carriage services which may result from the cutbacks in local authority expenditure, the phasing-out of new bus grants and the financial requirements he has placed on the National Bus Company.

Mr. Kenneth Clarke: The vehicle mileage of the National Bus Company, as with any other transport operator, must be determined by passenger demand and the efficient use of resources. It is not possible to assess the effect on total mileage of the particular circumstances set out by the hon. Member.

Mr. Dobson: Does the Minister accept that the National Bus Company predicts a loss of 60 million passenger miles in the forthcoming year as a result of these policies? Contrary to what the Secretary of State has said in the past, will the Minister accept also that it has nothing

to do with a drop in demand but is the result of shortcomings on the supply side of bus transport arising exclusively from Government policies?

Mr. Clarke: The National Bus Company's patronage fell by 10 per cent. in 1980, and mileage reductions have to follow the loss of passengers. My right hon. Friend and I recently met the board of the National Bus Company and its trade union representatives. I am sure that they appreciate that the future of the bus company depends on its ability to win traffic, get down costs, and match its services with demand. Its great success on the national express runs in building up patronage shows what can be done now that we have freed the company from some of the licensing restrictions.

Mr. Stephen Ross: Is the Under-Secretary aware of the disastrous effect that the economic recession is having on National Bus subsidiaries which operate in holiday areas such as mine, where already Southern Vectis has had to approach the local authority for a handout of £50,000? Will the hon. and learned Gentleman take that into account in considering the pressures on local authorities, particularly with his right hon. Friend the Secretary of State for Environment? Local authorities are now in an impossible position if they wish to maintain rural bus services.

Mr. Clarke: The National Bus Company already gets £94 million from central and local government, so it receives substantial support. We still back with grant county councils which give revenue support to services in their areas, and we are anxious that they should extend rural services in every way. However, that involves trying to identify genuine passenger demand and then finding low cost and suitable means of meeting it.

Mr. Booth: Does the Under-Secretary concede that the 16 million service miles which the NBC intends to cut from its existing services will all take place in either rural services or off-peak urban services—in other words, nothing will be taken from the express services? If the hon. and learned Gentleman acknowledges that, does he care that there is to be a massive drop in public transport services in some parts of the country? If he does care, will he take some initiative, with the National Bus Company, with the local authorities whose areas are affected, or with both to try to save some of these passenger transport services?

Mr. Clarke: As the right hon. Gentleman acknowledged, the mileage and the passengers are increasing on the express services. The reductions in mileage are taking place where the passenger demand has gone. There is no point in running empty buses for the sake of it, if there are no passengers for them. The answer in the end is to match supply to demand and cut costs. In areas such as East Devon, where the National Bus Company has withdrawn from many routes, I am glad to say that a number of low-cost local independent operators have come forward to provide flexible and cheaper services, which are meeting the demand for transport. We are interested in the demand for transport and not in just keeping one system going in a way that suits the right hon. Gentleman.

Mr. Marland: Does my hon. and learned Friend consider that this might be an opportunity, with the drop in rural bus services, actively to promote the car-sharing scheme that the Government started? If the Government


showed more interest in that and spent on it a minuscule amount of money—certainly compared with the amount that is spent on subsidising bus services—there would be a substantial return on that money and there would be more interest in the scheme.

Mr. Clarke: We certainly take an interest in the scheme. Of course, we got rid of all the absurd restrictions on car sharing, although the Opposition wanted to defend each restriction when we debated the matter last year. We are now advertising the change in the law, so that people know that they can share cars sensibly, sharing the costs without insurance fears, and so on. I am convinced that many more people will begin to share their cars and reduce transport costs in making regular journeys to work and to the shops, and so on.

Channel Link

Mr. Spriggs: asked the Secretary of State for Transport what recent representations he has received about planning for a Channel link.

Mr. Fowler: I am currently considering eight proposals for a fixed link, including that of British Railways Board, the report of the Select Committee and an option for the development of the existing services. I have also received representations from a number of transport and other interests.

Mr. Spriggs: Will the right hon. Gentleman confirm that the single-track rail link is a threat neither to shipping nor to lorry traffic across the Channel? In view of the strong endorsement by both the European Parliament and the House of Commons Select Committee on Transport for the Channel single-track link, will he take steps to expedite a decision in favour of the scheme, as outlined in the railway plan?

Mr. Fowler: One of the aspects that we are considering is the effect of a tunnel, or any other Channel link, upon the existing trade. That is one of the crucial questions that we have to settle. Material is still coming in from the promoters on the Channel link. I want to consider that material, and I shall make a statement in due course.

Mr. John Wells: Will my right hon. Friend understand quite clearly that there is a considerable degree of urgency about this, and at an early date make a public statement from which there can be no going back? Lamentably, this Parliament will not run for ever, and it is necessary that a definite decision should be taken.

Mr. Fowler: I understand the urgency of the matter, and I endorse what my hon. Friend said in that respect. A number of stages remain, and we are still looking at the evidence that is coming in from the promoters. Talks and negotiations are to take place with the French Government. We shall make as quick progress as we can.

Mr. Stott: With reference to what my hon. Friend the Member for St. Helens (Mr. Spriggs) said about the recommendations of the House of Commons Select Committee on Transport, when will the Secretary of State respond to those suggestions? Will he make a statement before the recess?

Mr. Fowler: I cannot guarantee to make a statement before the recess, but I am trying to get all the information together as soon as I can. When that is done we shall

respond to the Select Committee. Clearly, there is no point in responding before we have gathered together all the information from the promoters.

Mrs. Kellett-Bowman: Does my right hon. Friend accept that many of the firms in the North-West are desperately keen to get a decision on this matter. They believe that the provision of a link with the Continent will assist their competitive position, in that it will reduce the proportion of transport costs in their overall costs and thus help to alleviate the sad unemployment in the North-West and the North?

Mr. Fowler: There is much support on both sides of the House for the Channel link. Problems clearly have to be overcome. We want the link to be privately financed, and that is one of the aspects that we are examining at present. We shall make as much speed as we can.

Trunk Road Programme

Mr. Fitch: asked the Secretary of State for Transport if he is satisfied with the progress of schemes in the trunk road programme.

Mr. Kenneth Clarke: Yes, Sir.

Mr. Fitch: Does the Under-Secretary agree, in view of his brief reply, that it is very slow progress? Since only six bypasses were opened in the year 1980–81, compared with 17 in the year 1975–76, and since there is considerable unemployment in the construction industry, with men and machines idle, could the Government do something at least to pursue a bolder programme for the construction of bypasses?

Mr. Clarke: The hon. Gentleman chose his years carefully. He made a comparison with a year before the IMF cuts, in response to which the Labour Government halved the funds that were available for the trunk road programme. In fact, we are making extremely good progress. We are up to timetable with our White Paper. We are even accelerating some schemes, and beginning them before they were booked in last year's White Paper. The road to Grimsby is an example. As the programme develops there will be room for more bypasses. My right hon. Friend and I are very anxious to see fast progress in building bypasses to take heavy industrial traffic out of our older market towns and villages.

Mr. Higgins: If the prospect of maintaining existing motorways and trunk roads is likely to increase steadily and make a bigger and bigger claim on existing resources, which might delay the construction of bypasses, will my hon. and learned Friend re-examine the possibility of imposing tolls on roads to get more finance to pay for the maintenance of existing roads?

Mr. Clarke: We certainly have increasing demands for resources for road maintenance. We have to get good value for money for that to make sure that it does not slow up the process of construction by taking funds. From time to time we have considered the question of toll roads, but it is very difficult to devise satisfactory systems in this country, because of the density of traffic on our motorways, compared with Continental systems. An enormous amount of land would be required for the toll booths, and there might be great delays to traffic. Moreover, in this country it is easy for traffic to divert


from toll roads to non-toll roads, and we would not want traffic going off the motorways and using the old roads that they were meant to replace.

Mr. Nicholas Winterton: Does my hon. and learned Friend agree that trunk road and motorway programmes will have a marked effect upon people's attitudes to the Channel tunnel link? Will he therefore arrange with his right hon. Friend at least to make an announcement in the Queen's Speech for the new Session of Parliament of an intention to proceed with the tunnel so that our road programmes can be geared to it, and perhaps to the European Channel Tunnel Group proposals, which are acceptable to British Rail and which will bring great benefits to the United Kingdom?

Mr. Clarke: We are making sure that we do nothing about trunk roads that is incompatible with the Channel tunnel. We had the Channel tunnel in mind in planning the future of the M2 and the M20 and the link between Folkestone and Dover. My right hon. Friend has just said that he hopes to make an announcement about the Channel tunnel in the near future. We shall bear in mind what my hon. Friend says, and I know that my right hon. Friend will try to meet the timetable that he has suggested.

Railways (Electrification)

Mr. Cook: asked the Secretary of State for Transport what progress has been made in considering the recommendations of the Department of Transport/British Railways Board joint review of main line electrification.

Mr. Hooley: asked the Secretary of State for Transport when he expects to make an announcement about plans for the electrification of the British Railways system.

Mr. Fowler: I refer the hon. Members to the statement that I made in the House on Monday 22 June.

Mr. Cook: Does the Secretary of State recall that the hold and imaginative proposals within the joint review were the results of three years' consultation following a published paper? Does not he accept that the process by which all three options of that joint review were rejected on the basis of an unpublished paper, from a "think tank" that consulted nobody. is a most unsatisfactory way for a Government to reach decisions? Does he realise that British Railways are left with an electrification scheme with no particular mileage or expenditure targets and that the resulting "ad hoc-ery" will make it more difficult and more expensive for them to manage what should have been a strategic industrial programme?

Mr. Fowler: I refer the hon. Gentleman to the joint report to which he referred. He will remember that the assumption of the report was that the inter-city and freight business would continue to win traffic and to flourish. Regrettably, that assumption has not been borne out. The trading postion for both inter-city and freight is very much down this year. In spite of that, we intend to go ahead with the programme that I announced.
As to the reaction of British Railways, I refer the hon. Gentleman to what their chairman said, and to what the Rail Council said, which was that this was a positive way ahead, which gave a fighting chance for the future of British Railways.

Mr. Hooley: Will the Secretary of State insist that high priority is given to the electrification of the service

between London and Sheffield, which has been scandalously neglected over the years? Is he aware that the current service from London to Newcastle—268 miles—is as fast as the service from London to Sheffield, which is only 167 miles?

Mr. Fowler: I have asked British Railways to submit a programme of schemes that can be started within a 10-year timetable. They will be ranked in order of return. Doubtless, what the hon. Gentleman said about his service will be taken into consideration.

Mr. Needham: Is my right hon. Friend aware that if British Rail and the unions do not sort out their productivity problems fairly rapidly, and if the orders do not start to flow for the programme, many of the private companies that are desperate for orders will no longer exist because they will not have the work force to provide the goods and services when ordered?

Mr. Fowler: My hon. Friend makes a fair point. The advantages of the programme accrue not only to British Rail but to manufacturing industry. The one point that should be taken on board is that it is in the interests not only of the Government and British Rail but of the passengers and the industry that we make progress in agreement.

Mr. Bradley: Is the Secretary of State aware that his proposed method of approval of electrification by stages is causing maximum uncertainty within British Railways and their supplying industries? Does he not agree that that method is hardly conducive to efficient forward planning, when much rolling stock needs replacing and much resignalling needs to be carried out? Will he not reconsider his proposed method?

Mr. Fowler: I shall not reconsider my proposed method. As the hon. Gentleman said, it is true that it is not a blanket commitment to investment, come what may. It would not be right for any Government to give that sort of commitment. It is a promise of a running programme, provided that sensible conditions are met. The hon. Gentleman, with his knowledge of the rail industry, knows that the conditions that we have set out can be met.

Mr. Foulkes: How will the Secretary of State's request to British Railways to produce a 10-year programme for electrification relate to decisions within the area of a passenger transport executive such as Strathclyde? Will he say how a decision will be reached on the Ayrshire electrification, as opposed to the electrification of the Glasgow to Edinburgh line or the Glasgow to Carlisle line? People in Ayrshire are anxious about that decision.

Mr. Fowler: The essential point made by the hon. Gentleman is that basically it is an issue between Strathclyde and British Railways. On the question of general policy, meetings have been taking place between my Department and British Railways ever since I made a statement a week or 10 days ago.

Mr. Cormack: When my right hon. Friend is discussing electrification and other advances with Sir Peter Parker, will he tell him that travellers, be they tourists or business men, expect refreshment on trains? Will he also tell him that they expect a decent British breakfast?

Mr. Fowler: I know that concern has been expressed about the British breakfast. Obviously, it is an operational


decision for British Railways. Clearly they will have to balance the benefits of a British breakfast with the loss currently being made on catering.

Mr. Stott: In view of the Secretary of State's declaration in his statement last week of a passionate commitment to the future of the railways, will he say what backing, in clear financial terms, he is prepared to give to the rail electrification programme? On the question raised by my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley), will he give the House an assurance that if the British Rail Board identifies the Midlands main line north of Bradford to Sheffield as a specific priority for electrification he will give it the necessary backing and the go-ahead?

Mr. Fowler: As I have already said, we are asking British Rail to set out a programme of schemes that can be started within a 10-year timetable. I emphasise that it is a 10-year timetable. The schemes will be ranked in order of return and their costs will be taken into account when setting the external financing limit and the investment limit for a particular year. At the same time, we shall want the new business plans of British Rail both for inter-city and the freight business.

Rail Bus

Mr. Heddle: asked the Secretary of State for Transport what progress has been made by British Railways on the introduction of the rail bus on rural branch lines; and if he will make a statement.

Mr. Fowler: I understand that the railways board will be testing prototypes of the class 140 lightweight diesel multiple unit and the rail bus in service throughout the summer.

Mr. Heddle: Does my right hon. Friend agree that there is a considerable export potential for the rail bus? Will he ensure that British Railways take every possible step to capture that lucrative market in a thoroughly commercial way?

Mr. Fowler: I am sure that my hon. Friend is right. If we can develop a low-cost vehicle and build it efficiently, there is no reason why it cannot be successfully exported. There is considerable interest in it from other countries.

Mr. Campbell-Savours: What work is being carried out by the Secretary of State's Department to establish the cost benefits to British Railways of the switch from diesel multiple units to the rail bus?

Mr. Fowler: During the next 12 months British Railways will try out and experiment with both of those vehicles. I hope that we shall be able to organise a demonstration project that will aim to evaluate exactly what the hon. Gentleman wants to see.

Sir Albert Costain: Is my right hon. Friend aware that certain lines in Britain, for example, from Ashford to Lydd, must be kept open for goods traffic to cart nuclear waste from power stations? Is not that a good example of where experiments could take place? Are British Railways considering that possibility, and will he encourage that?

Mr. Fowler: My hon. Friend the Member for Devon, North (Mr. Speller) has a Bill before the House which may help in that area. On the general principle of my hon. Friend's question, I am sure that it is right to concentrate

on seeking to reduce the operating costs of rural lines rather than for ever being concerned with cutting off the lines. We have turned our back on that policy. We are trying to achieve a cost-effective railway system and a rural railway system.

Motor Cycle Test

Mr. Nicholas Baker: asked the Secretary of State for Transport what response he has so far had to consultations on the introduction of a two-part motor cycle test.

Mr. Kenneth Clarke: The response has been wide and helpful. We are encouraged by the general support expressed for the proposed two-part test. There are some reservations about certain of the detailed proposals we made for implementing the new test and we shall consider these carefully before consulting on draft regulations.

Mr. Baker: Is my hon. and learned Friend aware that there is concern that there should be sufficient examiners for the test? Will he ensure that the waiting period for the test is reduced to the absolute minimum? Will he also ensure that there are adequate testing facilities throughout the country?

Mr. Clarke: The consultations in which we are now engaged are aimed mainly at discovering whether there will be enough facilities and enough examiners to enable the new system to begin from 1 January 1982. We are also considering the waiting period for driving tests. I am glad to say that the result of our recruiting campaign is that the waiting period is reducing satisfactorily. The average waiting period outside London is now only 13 weeks and it is still coming down. When the two-year limit for motor cycle provisional licences is introduced, which will not be until October 1982 and will not take effect until October 1984, the problem of waiting times should not be anything like so serious.

Road Signs (Small Businesses)

Mr. Neale: asked the Secretary of State for Transport if he will seek to amend the law relating to the posting of road directional signs for small businesses on verges of bypasses and motorways; and if he will make a statement.

Mr. Kenneth Clarke: We have now approved the introduction of directional signs to local services in bypassed communities, provided that these are not paid for by highway authorities. I understand that the English Tourist Board hopes to publish the report of the joint working party on tourism signposting within the next two or three months, and I would like to see and consider this before deciding whether other changes should be made.

Mr. Neale: Small businesses throughout the United Kingdom will be heartened by the continuing interest in this matter of my right hon. Friend and my hon. and learned Friend. However, does my hon. and learned Friend agree that the growth and employment potential of small businesses would gain tremendously, where they exist close to trunk roads and motorways, if there were better signing for them? If the signs were available for the benefit of motorists, does he agree that it would save motorists on motorways such as the M5 suffering from the extortion that is now being practised by the motorway


service station at Bristol, which is charging £1·69 per gallon for petrol, and similarly at Taunton, which is charging £1·75 per gallon?

Mr. Clarke: We are always anxious to do anything possible to encourage small business. The Department's only concern is that road signs should be safe and that the information on them should be accurate and useful for motorists. Subject to those conditions, we are happy to encourage them. I am glad to say that there are some welcome improvements taking place at motorway service areas now that we have sold them to the operators and freed them from some of the old restrictions. They are now allowed to advertise their petrol prices, and my hon. Friend will note that prices are coming down on the motorway service areas.

Mr. Campbell-Savours: Does the Minister agree that the national park planning boards have a direct interest in what he recommends. Will he agree to consult them before any changes are made?

Mr. Clarke: I was dealing with signs on highway land. We shall authorise signs so long as they bear useful information and they are safe. Other signs alongside roads are subject to town and country planning legislation. That is a matter for my right hon. Friend the Secretary of State for the Environment. We do not want commercial signs cluttering fields alongside roads.

Mr. Waller: Does my hon. and learned Friend recognise that the criteria that have applied to the inclusion of towns on motorway direction signs have not always been to the advantage of motorists or local inhabitants? Will he bear in mind that motorists are capable of assimilating more than the name of one or two towns at a time and that some towns of a considerable size are omitted from motorway signs?

Mr. Clarke: We try to take a sensible view of these matters and we consider individual suggestions. We cannot feature a dozen towns on every motorway sign to satisfy civic pride in every community. Our aim is to put as many towns of reasonable size on each sign as the motorist can assimilate.

National Bus Company (Subsidy)

Mr. Michael McNair-Wilson: asked the Secretary of State for Transport what subsidy is paid to the National Bus Company annually.

Mr. Fowler: Grants from central and local government amounted to £94 million in 1980.

Mr. McNair-Wilson: Does my right hon. Friend agree that the Government financial assistance could be reduced if the inappropriate capital burden carried by the National Bus Company were lightened? Is not it a fact that the company's £5·4 million operating profit last year was turned into a loss of £11·8 million as a result of these historic debts?

Mr. Fowler: As my hon. Friend knows, we have asked consultants to examine the distribution of the capital debt. Capital debt is a normal expense of business. Interest on the capital debt is 1·7 per cent. of the company's turnover, which is half the percentage that obtained when the previous Labour Government set up the company.

Mr. Wellbeloved: Will the Minister examine carefully the proposals of the Greater London Council to subsidise

Tube fares at the expense of the work force of the Underground service and at the possible expense of the ratepayers in the area that I represent, who will have to subsidise an Underground system from which they draw no benefit?

Mr. Fowler: I am glad that that message is going out loud and clear in London and throughout the United Kingdom. The policy that is being pursued by the GLC will place new burdens not only upon the domestic ratepayer but upon the industrial ratepayer. At a time of high unemployment it cannot make sense to pursue such a policy.

Mr. lain Mills: Is my right hon. Friend concerned about speculation over changes in the subsidisation of public services in the West Midlands and about the relative roles of private and public bus services?

Mr. Fowler: The comments that I have received indicate that industry is extremely concerned about the new imposition that is being placed upon it. At a time when unemployment is so high, it is not unreasonable to say to the West Midlands county council that it should reconsider its policy to ensure that it is relevant to the needs of the area.

Mr. Haynes: When will the Secretary of State live up to the position that he holds and provide the services for which his Department is responsible—I have in mind the money that is not going to the rural areas—instead of taking them away from rural areas?

Mr. Fowler: I suspect that the hon. Gentleman' s definition of my living up to my position means taking more and more from the taxpayers' pocket. The Government are providing over half a billion pounds for the bus industry. We have removed the restrictions that stand in the way of new services developing. That has been an equally important contribution to the bus and coach industry.

Road Accidents

Mr. Dormand: asked the Secretary of State for Transport what was the number of fatal and serious road accidents, respectively, in 1980.

Mr. Fowler: The complete figures for 1980 are not yet available, but the preliminary estimate indicates that about 6,000 people were killed and 80,000 seriously injured in road accidents. The position is, therefore, undoubtedly serious, but the figures do show that casualties have fallen in each of the last two years and the number of deaths for 1980 looks like being the lowest since 1958. This is in spite of motor traffic having trebled over that period.

Mr. Dormand: Does the right hon. Gentleman agree that if that number of people were killed in aircraft or railway accidents each year there would be a huge outcry? Surely the Government should be launching a massive campaign about the seriousness of the situation. The right hon. Gentleman says that the casualty figures are reducing but he has admitted that they are still extremely serious. Does not that attitude reveal serious complacency on the part of the Government?

Mr. Fowler: There is no complacency on the part of the Government. In the Transport Bill that is currently in another place we are taking action in some of the most


serious areas of road casualties—for example, drink-driving and motor cycle safety. The hon. Gentleman should not deny that. The trend is for road casualties to decrease. If the hon. Gentleman compares our record with the records of other European countries he will find that ours is one of the best in Europe.

Mr. Henderson: Does my right hon. Friend agree that the number of road accidents could be reduced if more people knew what the legal speed limits were? Is not it time to enshrine statutory instruments in primary legislation?

Mr. Fowler: I shall consider that. If my hon. Friend feels that there is confusion we shall consider making more publicity available. We have changed the rather eccentric position that obtained at the time of the fuel economy speed limits. There is not as much confusion as there once was.

Mr. Sheerman: I welcome the low level of casualties last year. Does the right hon. Gentleman not feel that it is a sad reflection on this Chamber that we have to rely on another place to give the House the opportunity to vote on the single most cost-effective way of reducing deaths and serious accidents—namely, compulsory seat belt legislation?

Mr. Fowler: I am not clear about the hon. Gentleman's complaint. If the proposal of the other place remains in the Bill the House will have the opportunity to vote upon it.

Concessionary Fares

Mr. Skinner: asked the Secretary of State for Transport what progress has been made by his Department in assisting the co-ordination of concessionary fares schemes on a local basis.

Mr. Kenneth Clarke: The responsibility for coordination lies with the local authorities concerned but we have made a point of encouraging them to smooth out any unnecessary local differences.

Mr. Skinner: Was not there something sinister in the announcement made by one of the Transport Ministers earlier today, asking local authorities to submit their fares policy for the past year and forthcoming years? Is the Minister aware that the county council elections resulted in more than 900 gains for the Labour Party and that those electors were voting for cheap, free and concessionary fares throughout the land? Can we assume that when the Prime Minister talked about putting the country back on its feet she was referring to the blind, the sick, the old and the disabled having to walk instead of having the freedom to ride?

Mr. Clarke: We are concerned that with the grants that we give county councils should use the resources available in the most effective way on transport. Taking down the cheap fare in London from 12p to lop will not produce a dramatic switch from cars to buses. It is only dealing with ratepayers' money in a rather frivolous way. With regard to concessionary fares, we must let local authorities decide their own priorities. They also have to give revenue support to rural services and they have to provide other services for the elderly. Demands and local needs vary from place to place.

CIVIL SERVICE

Dispute

Mr. Woolmer: asked the Minister for the Civil Service if she will make a statement on the latest position of the Civil Service pay dispute.

The Minister of State, Civil Service Department (Mr. Barney Hayhoe): I refer the hon. Member to the statement that I made to the House last Monday.

Mr. Woolmer: Does the Minister recognise the deep feeling in the Inland Revenue staff union, in which almost half of those polled in the latest round of consultations voted for all-out strike action. Is he aware that the revenue collection service is now, to all intents and purposes, at a standstill? Will the Minister confirm the newspaper report to the effect that the Government intend to bring forward legislation to alter the contracts of civil servants? Would not that be a further demonstration that the Government are not concerned with improving industrial relations, but are tempting the unions into further action?

Mr. Hayhoe: I recognise the strength of feeling that was displayed during the consultation process with the Inland Revenue Staff Federation. With regard to the speculation in the press, the Government have no intention at present of taking that action.

Mr. Higgins: Will the Minister clarify a point with regard to the 7 per cent. pay offer? Is it the case that that was brought within the cash limit on the basis that the numbers employed would be reduced below that originally intended? If so, how is that compatible with the Government's commitment to reduce the size of the Civil Service as much as possible and why was it felt that the figure should be 7 per cent. rather than a lesser or greater one?

Mr. Hayhoe: The 7 per cent. figure is out of the 6 per cent. cash limit, which is, in effect, taking 107 out of 106, if one sees those figures in percentage increases. In the judgment of the Government that is achieved by administrative savings on pay-related expenditure and also by cuts in staff numbers beyond those which were taken into account in the estimates.

Mr. Alan Williams: Will the Minister confirm the figures given to me in a parliamentary answer by the Prime Minister on 8 June, which showed that more than 2 million public service workers have had settlements of over 7 per cent.? If that is not so, where did the Prime Minister go wrong? Will the Minister also confirm the implication of a written answer that he gave me last week to the effect that 7 per cent. is not the highest possible figure compatible with the 6 per cent. cash limit and that the ceiling will depend on post-settlement adjustments, which in any case will have to take place in Departments? Does he not realise that in asking for more than 7 per cent., all that the Civil Service unions are doing is to follow the advice given by him and by the Prime Minister, namely, to be guided by the more than 2 million public sector workers who have already settled?

Mr. Hayhoe: I confirm the figures given by the Prime Minister. They show that about 2 million workers have settled at around the 7 per cent. Figure—some a little over and some a little under, but within the 6 per cent. cash limit that we in Government have said must be maintained


this year. In the judgment of the Government, the 7 per cent. offer to the Civil Service is the best that can be offered without breaching that 6 per cent. cash limit.

Mr. McCrindle: Has not this dispute sunk to a sad and appalling level when the strikers are in the process of depriving their retired colleagues, who are public service pensioners, from receiving their dues? How does the Minister assess the effect on public opinion in the light of such developments?

Mr. Hayhoe: I agree with my hon. Friend that it is a sad and nasty twist of the dispute that the Paymaster General's computer staff at Crawley have come out, with the net result of putting at risk a large number of pensions for public servants, such as civil servants, teachers, Service men and also their widows and dependants. I believe that the vast majority of civil servants will condemn that action.

Appointments (Clerical Assistant and Clerical Officer)

Mr. Dubs: asked the Minister for the Civil Service how many appointments were made in 1980 in the Civil Service to the posts of clerical assistant and clerical officer; and how many of these were (a) women and (b) members of ethnic minority groups.

Mr. Hayhoe: In 1980 19,527 clerical assistants and 7,067 clerical officers were appointed in the Civil Service; of those 15,259 clerical assistants and 4,927 clerical officers were women. Information on the ethnic origin of those appointed is not recorded.

Mr. Dubs: Given that an increasing number of civil servants—men as well as women—are keen to have the choice of part-time and flexible working, will the Minister take positive steps to encourage all Departments to make such opportunities as widely available as possible?

Mr. Hayhoe: At the moment, Departments have an ability to make -flexitime" arrangements possible. As I explained in the Adjournment debate on these matters last Friday, a review group composed of management and trade unions is now considering the implementation of recommendations and progress made since the Kemp-Jones report, which was about encouraging opportunities for women in the Civil Service.

Mr. Forman: What opportunity will there be in the clerical grades for the introduction of new technology? How many word processors are being operated by the Civil Service in Whitehell?

Mr. Hayhoe: The number of word processors is about 500. A White Paper about efficiency in the Civil Service, giving further details about that aspect, is being published later today. I suggest that my hon. Friend should look at that. An agreement is being made between the Government and the Civil and Public Services Association with regard to word processors. We are looking at other ways in which the technology can be brought into the Civil Service to make it more efficient and effective.

Union Recognition

Mr. Ron Brown: asked the Minister for the Civil Service, how many unions are officially recognised by the Civil Service.

Mr Hayhoe: National recognition has been granted to 21 non-industrial and industrial Civil Service trade unions.

Mr. Brown: Does the Minister accept that those trade unions have been responsible and moderate for a long time—perhaps too moderate? Does he also appreciate that because of Government policy, particularly wages policy, those moderates are being driven to militancy? That is a fact of life. Does not the Minister also appreciate that pie-in-the-sky inquiries will not solve the dispute? The dispute will go on and will become more and more intense. Is it not more sensible—

Mr. Speaker: Order. The hon. Gentleman has asked two questions.

Mr. Hayhoe: The leaders of the nine unions concerned with the non-industrial Civil Service are not showing proper, responsible leadership at present. If at the unions' meeting tomorrow, normal working were to be recommended, the leadership would be showing responsible leadership.

Mr. Alan Williams: In the Minister's relationships with the unions will he make unequivocally clear what he was saying to the right hon. Member for Worthing (Mr. Higgins) and to me, which is that the 7 per cent. limit said by the Government to be an absolute ceiling is not an absolute ceiling, but that the Government are willing to negotiate within the 6 per cent. ceiling and that figure s other than and higher than 7 per cent. could be negotiated within that 6 per cent. ceiling? That is what he said earlier.

Mr. Hayhoe: As I have said many times—and as my right hon. Friend the Lord President of the Council has said, both to the unions and in Parliament—in the judgment of the Government 7 per cent. is the best that can be offered so as not to breach the 6 per cent. cash limit.

European Council (Luxembourg Meeting)

The Prime Minister (Mrs. Margaret Thatcher): With permission, Mr. Speaker, I will make a statement on the meeting of the European Council in Luxembourg on 29 and 30 June, which I attended with my right hon. and noble Friend the Foreign and Commonwealth Secretary. The meeting also gave me the opportunity to have a first and very friendly meeting with the new President of France, M. Mitterrand.
At the end of the Council's meeting the Presidency gave a summary of the discussions on Community matters and we issued an agreed press statement on a number of international questions. I have placed copies of both these texts in the Library of the House.
The discussion on the economic situation provided a valuable occasion for hearing the views of all the Heads of Government, three of whom were attending the European Council for the first time. The Commission gave us a useful analysis of the prospects. The Council saw the first cautious signs of limited improvement in the business cycle, even though inflation and unemployment have by no means been brought under control. On objectives we were all agreed: we must overcome unemployment and inflation and return to a situation of economic growth, stability and satisfactory levels of employment. We recognised, however, that the major responsibility for tackling these problems lies with national Governments, because action needs to take account of the different economic situations in each member State. The differing levels of inflation, unemployment, balance of payments and budget deficits mean differing constraints and opportunities for member countries.
The effectiveness of action by national Governments can be increased by co-ordination within a Community framework. We were particularly concerned that full use should be made of the Community's financial instruments and of the facilities of the European Investment Bank to promote the flow of productive investment, including the growth potential in small and medium businesses.
We recognised that the changing patterns of world trade mean structural changes in our own industries. The focus should be on investment in industries with potential for the future rather than on economic activities that are bound to decline in importance.
There was agreement on the need to improve the Community's internal market for both goods and for services such as insurance and air fares, which are of special importance to this country.
We also reviewed the matters for discussion at the forthcoming economic summit meeting in Ottawa. The level and volatility of interest and exchange rates could retard economic recovery in the Community. Discussion will need to be pursued with the other major monetary powers.
On trade, the Council discussed the threat to the smooth functioning of the world trading system which comes from the excessive concentration of Japanese exports on sensitive sectors. Further, it stressed the need for the Japanese market to be effectively open to foreign trade. This will need to be pursued within the Community and at Ottawa.
We also approved the recent report of the Foreign Affairs Council on North-South policy. On the recent

report of the Commission about the Community budget and changes in the common agricultural policy, a satisfactory impetus was given to further work. The first stage is to clarify the Commission's document to see, for example, how the budgetary proposals could affect each member State.
In September, a special group will be set up to assist the General Affairs Council to make thorough and timely preparations for the next meeting of the European Council, to be held in November under our Presidency. The United Kingdom assumes the Presidency of the Community today and it is our intention to do all we can to press forward with these discussions, which are so important for the future of the Community, with the objective of reaching agreement within the timetable laid down last May.
The European Council also discussed the Middle East. As the communiqué makes clear, the Ten must review the results of the contacts established by the Dutch Presidency on the basis of the Venice declaration. In consultation with the United States and the parties concerned it will be for the Ten to consider how best to make an effective contribution towards a comprehensive peace settlement in the Middle East.
The European Council approved and published a proposal on Afghanistan which has been in preparation for some time and is the result of a British initiative. The purpose is to establish the framework for a political solution that all the parties concerned accept as the objective. The proposal for an international conference in two stages builds upon earlier proposals and offers, we believe, a reasonable basis for the peaceful solution of a problem that remains an important cause of international tension. My right hon. and noble Friend the Foreign Secretary will fly to Moscow on Sunday for talks about the proposal with the Foreign Minister of the Soviet Union. An initiative designed to restore the independent and non-aligned status of Afghanistan is a constructive and distinctive way to mark the start today of the British Presidency of the Ten.

Mr. Michael Foot: May I put four matters to the right hon. Lady, starting with the last matter to which she referred—Lord Carrington's mission to Moscow. We wish him well in that visit. We hope that he will meet with even better success than he has cautiously hoped for in his description of the possibilities there. We hope that progress will be made, in the interests of the people of Afghanistan and in the light of what could be the effects elsewhere if such an agreement could be secured. Therefore, our eagerness to see success there is unqualified.
But does not the fact that the right hon. Lady and her colleagues discussed these other foreign policy questions make it all the more remarkable that apparently they had no discussion on the supreme question of disarmament and how we are to get disarmament negotiations going? Were there discussions on the subject? If there were discussions, does not the right hon. Lady think that the subject is of sufficient importance to justify her reporting to us on it? If there were not discussions, does she agree, on consideration, that the most important question is to try to have genuine, far-reaching discussions on disarmament, particularly in the light of the exchanges that have taken place over recent weeks between Mr. Brezhnev and others?


With regard to the EEC questions, such as the budget and the reference to impetus to further work having been secured—nobody knows exactly what that means—will the right hon. Lady say what was Britain's net contribution to the EEC last year, and what we shall pay this year? Would not the Commission's proposal still leave us as a net contributor, even if the Community agrees with it? Could the right hon. Lady give us further and more enlightening information than she has so far given on that subject?
With regard to the general economic discussions, the more discussions the right hon. Lady has with President Mitterrand, the better we think it will be. It would appear that, at any rate in the communiqué, she has recognised, with the other Heads of Government, that the defeat of unemployment ranks even before the defeat of inflation. I do not know whether the change of language was produced as a result of President Mitterrand's advice, but we hope that the right hon. Lady, particularly in the light of her own references to the differences in the economies of the nations, will take account of what is being proposed by the new Government of France, as it offers far greater hope of dealing with these problems than anything that she has proposed.

The Prime Minister: I thank the right hon. Gentleman for his message of good will to my right hon. Friend the Foreign Secretary at the beginning of his mission to the Soviet Union on the Afghanistan initiative.
With regard to disarmament, defence is outside the competence of the EEC. Disarmament has been dealt with in NATO and we are agreed that discussions—particularly on the cruise missiles and the SS20s—should start with the Soviet Union by the end of the year.
With regard to the budget, the problem was that France is not yet ready to discuss the substance of the budget proposals and this naturally holds us up. It is, however, understandable that France should wish for a period to consider what position she will take on the matter. We could therefore determine at the moment only the procedure that we shall adopt to get full and proper proposals before the European Council by next November. The procedure is set out in the communiqué.
If my memory is correct, our net contribution this year will be of the order of £400 million—a great deal less than would have been the case if the regime left to us by the Opposition had persisted.
With regard to what the right hon. Gentleman said about M. Mitterrand, by far the majority view in the European Council was that more jobs depend on lower inflation. It was also the majority view that the way to fight for the reduction of unemployment was to fight for the reduction of inflation.

Mr. Foot: The right hon. Lady has replied on two matters. On the question of the budget, does she not appreciate that what the Labour Government wanted to do was to carry out resolutions passed by the House of Commons on the subject. The right hon. Lady and the present Government agreed to those resolutions. Why does she not advocate in the discussions what she and the Government agreed in this House?
It is, of course, true that the disarmament discussions take place through NATO. Is the right hon. Lady content, however, with the slow-moving arrangements whereby the discussions are not to start until the end of the year? As

the Ministers in the Council discuss many foreign policy matters, and as disarmament touches upon foreign policy, why cannot she use her influence there to try to get the discussions brought forward to a much earlier date?

The Prime Minister: The Government did a great deal better in the budget negotiations than did the Labour Government. Thank goodness that we did. Otherwise we should be contributing vastly greater sums than we are. We are now considering a Commission document that takes into account not only the budget restructuring but also considers reforms of the common agricultural policy and the need to spend more on the economic and social fund. This is a major document. We approach it with the view that the result must be equitable to all partners. That seems to me a proper approach for any country that enters into a partnership.
Talks on disarmament are being continued the whole time. I assume that the right hon. Gentleman refers to the talks that will soon start on theatre nuclear weapons. The Soviet Union has a vast superiority in these weapons and would naturally wish to freeze the position as it is at present, with her being very superior in the numbers and position of the weapons and we having none in position. Talks on this issue will start as soon as possible. It is important that they should do so. We must finish those talks in a situation in which we on our side have sufficient capacity to deter the Soviet Union.

Mr. David Steel: is the Prime Minister aware that we on the Liberal Bench wish the Government well in assuming the Presidency of the European Community and commend, in particular, the initiative already taken on Afghanistan, which we see as the development of a coherent European foreign policy? I hope that this extends to the initiative on the Middle East.
On the internal policies of the Community, is it not disappointing that the right hon. Lady's statement contains so much emphasis on the pursuit of national policies against unemployment when the development of the regional and social policies of the Community could help massively to decrease the level of unemployment in the community as a whole?

The Prime Minister: I thank the right hon. Gentleman for his message of good will about the Presidency and also for his remarks about Afghanistan.
The right hon. Gentleman referred to national policies. If he looks at the figures for the economic position of each country he will find that they are very different. The levels of inflation are different; the levels of unemployment are different. Other countries have a higher level of unemployment than this country. The budget deficits are different. The money supply is different. It was stated that each of us must make maximum use of the margin of manoeuvre that we possess. The countries that have high inflation felt strongly that they could not do anything about unemployment by reflating in the short run because that would not only increase inflation but, in the longer run, would increase unemployment.
Each has to find the best mixture of policies suitable to the differing conditions in our national countries. Nevertheless, a part of the press summary that is perhaps not particularly well expressed—the press summary is not agreed among all countries; it is a general summingup—shows that the financial instruments of the Community can help. We had particularly in mind the


regional and social funds and also the resources of the European Investment Bank—the latter to get more investment started, particularly in the modern industries, and the former to help to relieve the social consequences of unemployment.

Several Hon. Members: rose——

Mr. Speaker: Order. I remind the House that this is a Supply day. A large number of hon. Members wish to speak in the debate on the car industry. There is also an opposed Ten-Minute Bill. I therefore propose to allow questions to run until 4 pm. If they are brief, it will be possible for a greater number of hon. Members to be called.

Sir Anthony Kershaw: Does the Prime Minister agree that the sentiments expressed by President Mitterrand about his country's attitude to Poland and to Afghanistan constitute a good augury for co-operation between our countries?

The Prime Minister: Yes. We all find the occupation of Afghanistan totally unacceptable. We are all agreed that the Poles must be left to sort out their own problems in their own way, as a sovereign country should.

Mr. Charles R. Morris: Is the Prime Minister aware that the whole House will be impressed by th enthusiasm of the Foreign Secretary and the European Council in seeking to persuade the Soviet Government to withdraw its 40,000 troops from Afghanistan? May we be assured that the Foreign Secretary and the European Council will demonstrate equal enthusiasm in persuading the Turkish Government to withdraw its 40,000 troops from the island of Cyprus?

The Prime Minister: I think that the right hon. Gentleman is not quite right about the number of Soviet troops in Afghanistan. The number is between 80,000 and 90,000. I am grateful for the right hon. Gentleman's expression of good will to my right hon. Friend over his initiative on Afghanistan. I have nothing to report about Cyprus, which is at the moment the subject of a United Nations initiative that we fully support, as I hope the right hon. Gentleman does.

Mr. Anthony Grant: On the question of trade, can my right hon. Friend confirm that, while recognising the problems of Japanese imports in certain sectors, the Heads of Government nevertheless remain wholly committed against any wave of protectionism or any fragmentation of the West into pockets of silly, little siege economies as advocated by the Opposition?

The Prime Minister: I am delighted to assure my hon. Friend that we remain committed against protectionism. This country, which depends on exports for so many jobs, must rely on an open pattern of world trade. Our problems arise from the concentration of the Japanese on certain limited sectors and also the fact that hitherto the Japanese have dealt with European countries one by one. We think it better that we deal with the Japanese as an economic community.

Mr. Andrew Faulds: I strongly endorse the initiative on Afghanistan, but will the right hon. Lady reassure the House that this initiative will in no

way be used as cover for a retreat from the Foreign Secretary's earlier intention to get things moving on the Middle East by meeting Chairman Arafat, a matter on which apparently Conservative Members are receiving considerable Zionist pressures to get that hoped-for meeting cancelled?

The Prime Minister: We all hope that the Foreign Secretary's mission on Afghanistan will be successful. It could open a new chapter in East-West relations. I come therefore to what I think is the hon. Gentleman's true question about the Middle East. He will find the position of the European Community set out in a communiqué. We must take into account the contacts of the last Presidency with many Arab countries.
I make it clear that my right hon. Friend, in his capacity as Foreign Secretary of the United Kingdom, has never had the intention of meeting the leader of the PLO. In his capacity as President of the Economic Community, should there be an Arab-European dialogue or should the particular initiative on the Middle East continue in the same way that it has, he may have to continue the practice of meeting the leader of the PLO, but only in his capacity as President of the European Economic Community. It would seem that the majority of contacts have already been made, and we feel that we have to consider the results of the contacts before deciding what to do next.

Mr. Faulds: See the Zionist pressure at work. They know all about it. Some of them have had the letters threatening them.

Mr. John H. Osborn: Is it not a fact that economic stagnation, as well as unemployment, is a problem facing Social Democrat countries as well as Christian Democrat countries? Will my right hon. Friend indicate the extent to which more funds will go to the regional development fund and the social fund and towards solving the common energy problem which is currently facing all the energy-consuming countries?

The Prime Minister: Most of us would prefer bigger resources from the Community to go to the economic and social funds. The extent to which we are successful in that will depend on how successful we are in reducing the surpluses of the European Economic Community and therefore the proportion of funds that go to the common agricultural policy. The Commission paper is largely taken up with that possibility.

Mr. David Stoddart: Is the right hon. Lady aware that far from thinking that she has the right mixture of policies to deal with the economic situation we think that she has only one policy—mass unemployment? Did she take the opportunity at the summit meeting to discuss with M. Mitterrand the policies of reflation that he is embarking upon, combined with earlier retirement and a shorter working week? Those seem to be the policies that would bring down unemployment in this country.

The Prime Minister: Other countries in the Community have a higher proportion of unemployment than we have. During the economic debate, M. Mitterrand put forward his policies and he was in a considerable minority in the European Council. His policy of reflation, by increasing the budget deficit, would take his budget deficit from 1½ per cent. of GDP to only 3 per cent. of GDP. Ours is already 4½ per cent. of GDP.

Mr. Albert McQuarrie: I congratulate my right hon. Friend on her statement today and I wish her every success during our Presidency. Will she make it a priority during the Presidency to endeavour to obtain agreement on the common fisheries policy, which is essential to the fishing industry in this country?

The Prime Minister: Yes, gladly. It was one of the first things that I mentioned to M. Mitterrand. I believe that most of us would like a common fisheries policy. We wanted to get it sorted out before the French election, but that was not possible. We should like to get one sorted out as soon as possible. But the terms must be acceptable to our fishermen.

Mr. Dennis Skinner: Is the Prime Minister aware that every time she goes on one of these Common Market junkets or summits, which she opposed when she was in Opposition, the unemployment figures not only of this country but throughout the Common Market rise? Did she tell the assembled guests at the summit about the time when the words were used: "It is sometimes said that Conservatives are associated with unemployment"? "That is absolutely wrong", said the speaker on that occasion. "We would have been drummed out of office if we had had the levels of unemployment that existed at that time." The speaker was the Leader of the Opposition, now the Prime Minister. The unemployment levels——

Mr. Speaker: Order. Will the hon. Gentleman bring his question to a conclusion?

Mr. Skinner: The speaker on that occasion was——

Mr. Speaker: Order. The hon. Gentleman is only stopping another hon. Member from being called because questions on the statement will finish at 4 o'clock. The hon. Gentleman is not asked to make a speech; he is asked to put a question.

Mr. Skinner: The date was 4 May 1977. The unemployment figure was just over 1 million. Cannot the Prime Minister hear the drum beats rolling telling her to get out?

The Prime Minister: That was a well-rehearsed supplementary question—very well rehearsed, and worked at very hard. I am not sure whether the hon. Gentleman is suggesting that British Leyland, British Steel and many other companies would have a better chance of being competitive if they were forced to take on twice as many people as they have now. They would not. They would have far less chance of being competitive. The best chance of getting better jobs is for each and every industry to do as Mr. Helmut Schmidt advocated—to be thoroughly competitive. Anything that the hon. Gentleman can do to increase that will be helpful, but I doubt whether we shall get much help from him in that direction.

Mr. John Farr: I congratulate my right hon. Friend on the initiative that she has announced. Will she assure the House that there will be no discussions on disarmament with the Russians until they have completely withdrawn their presence from Afghanistan?

The Prime Minister: I think that the NATO decision was that the discussions with the Soviet Union on disarmament regarding theatre nuclear weapons should start before the end of the year. Discussions on disarmament are continuing with the Soviet Union pretty well the whole time, but the purpose of this initiative is

to try to reduce and get rid of one of the worst sorts of international tension—the occupation of Afghanistan by the Soviet Union.

Mr. John Roper: Is the right hon. Lady aware that Members on both sides of the House welcome the initiative taken by the Foreign Secretary and supported by the European Council, to go to Moscow to try to deal with the problem of the Soviet invasion of Afghanistan since it is an essential precondition for any improvement in East-West relations? Will she look again at the question of the Council's involvement on disarmament? In 1979 the then Danish President of the Community spoke on behalf of the Community in the United Nations special session on disarmament. I believe that the Community can, on appropriate occasions—

Mr. Speaker: Order. The hon.Gentleman must ask a question.

The Prime Minister: I believe that the proper body to deal with disarmament matters is NATO.

Mr. Robin Squire: Did my right hon. Friend enjoy the experience—somewhat rare these days—of meeting Socialists who are both pro-EEC and pro-nuclear deterrent? On reflection, does she not find it a little strange that the President with those views appears to have been elevated to the pantheon of Socialist heroes?

The Prime Minister: I never cease to marvel at the variety of views held under the banner of Socialism.

Mr. Bob Cryer: In view of the Foreign Secretary's initiative in going to Moscow, will the Prime Minister be recognising the initiative of those winning athletes at the Moscow Olympics who have maintained contacts with the Russians and restore those awards which were so churlishly withheld?
When the Ministers were discussing Japan and her successful trading policy, did they take into account the fact that Japan spends less than 1 per cent. of GNP on defence and is not allowing research and development and ability to be sucked into foolish prestige projects such as Trident?

The Prime Minister: I note that the hon. Gentleman is anxious for the continuance of the honours system. We did not discuss it at the summit.
With regard to Japan, that is a point which I have put to the Japanese and in particular to the Japanese Prime Minister. Since they spend so little on defence, we might reasonably expect them to spend an unusually large amount on help to the less developed countries.

Sir Anthony Meyer: Does my right hon. Friend accept that there will be great satisfaction on both sides of the House about the excellent relations that she has clearly established with President Mitterrand? Will she confirm that it remains the policy of her Government to work for agreed solutions within the EEC which, rather than idle boasts about going it alone, are the way to secure results favouring this country in matters such as Japanese car imports and fisheries?

The Prime Minister: Yes, I confirm that. It is far better on trading matters to work through the Community, and on other matters I believe that we should work with the Community for a solution which is equitable to all partners and which is not unacceptable to any one of them.

Mr. Ron Brown: On the question of Afghanistan, why is it that the Prime Minister rejected Babrak Karmal's offer to negotiate on the question of Soviet troops earlier this year? After all, she received my letter regarding—Interruption.] Is this some cynical game, perhaps thought up by Ronnie Reagan? Or is this, on the other hand, a genuine attempt by the Government to try to resolve the issue of Afghanistan? We are all interested to know, and certainly the Afghan leaders are interested to know. Why has not the right hon. Lady or her Ministers attempted to get in touch with those leaders? Are they not important?

The Prime Minister: The hon. Gentleman should be neither surprised nor hurt that I have more faith and confidence in my noble Friend than in the hon. Gentleman.

STATUTORY INSTRUMENTS

Mr. Speaker: I undertook yesterday to give a considered reply to the point of order raised by the hon. Member for Keighley (Mr. Cryer) arising from replies given to him and to the hon. Member for Easington (Mr. Dormand) at Question Time on Monday.
The hon. Member submitted that when the Minister of State, Department of Trade stated on 29 June that an announcement about film quotas would be made shortly, she should have disclosed that on 25 June she had made an order prescribing what those quotas would be. As the hon. Member stated, the order was not laid before Parliament until 30 June.
In raising his point of order the hon. Member made reference to Standing Order No. 120. This order deals with the machinery for laying statutory instruments before the House but I cannot see that it imposes any obligation on Ministers to make public the contents of statutory instruments before they come to be laid.
In general, as I have often had occasion to rule, a Minister is responsible for the content of any answer which he or she gives, and, accordingly, I must inform the hon. Member that in my view this is not a matter for me.

Mr. Bob Cryer: I should like to raise a point further to the point of order, Mr. Speaker. When I raised the point of order, I also referred to "Erskine May" as a source of guidance, and since I had only just received the information when I raised the point of order, I was not able to specify. However, I wonder, Mr. Speaker, if you could explain whether you examined page 136 of "Erskine May" in preparing your comments—which, of course, I appreciate. Page 136 says:
It may be stated generally than any act or omission which obstructs or impedes either House of Parliament in the performance of its functions, or which obstructs or impedes any member or officer of such House in the discharge of his duty, or which has a tendency, directly or indirectly, to produce such results may be treated as a contempt even though there is no precedent of the offence.
Clearly, Mr. Speaker, the House not being informed of an action which the Minister had taken could be construed as impeding Members in the carrying out of their duties, because there may well have been Members in the Chamber on that occasion who would have raised questions had they been informed that the Minister had taken a decision, and by not revealing that and by promising a statement, that sort of action was impeded. Therefore, I suggest that it would come within the ambit of page 136 of "Erskine May".

Mr. Speaker: I have looked at page 136 of "Erskine May". I reached a different conclusion from that of the hon. Member. This is really not a matter for me. It is an argument between the two sides of the House. No rule or Standing Order of our House has been broken.

National Health Service Act 1977 (Amendment)

Miss Jo Richardson: I beg to move,
That leave be given to bring in a Bill to improve the availability of terminations of pregnancy within the National Health Service.
The House will not need to be reminded that the 1967 Abortion Act permits abortions to be performed legally if two doctors agree that the woman fulfils certain criteria laid down by the Act. The Act of itself did not put any specific duty on the NHS to perform abortions. This has produced hardship for many women, and in some cases later abortions than necessary.
The Lane committee was concerned about this, and in its 1974 report it pointed out that the National Health Service Act put a duty on the Secretary of State to
promote the establishment in England and Wales of a comprehensive Health Service designed to secure improvement in the physical and mental health of the people.
Lane concluded that within that wording the NHS
has a responsibility to provide for abortion.
The Lane committee went on to say:
Section 3(1) of the NHS Act 1946 requires the Secretaries of State to provide hospital and specialist services 'to such an extent as he considers necessary to meet all reasonable requirements.' The Committee's opinion is that as a matter of principle hospital and specialist services should be provided to such an extent that patients are not forced to seek therapeutic abortion in the private sector.
That was clear enough, but the situation is still the same in 1981.
My purpose in introducing this Bill is to make it a duty on health authorities to provide facilities for women in their areas—free, of course, as are other operations under the NHS. We are all, surely, agreed that abortion should performed as early as possible because that is the safest way, and the fact that the NHS has failed to meet the needs of women and now performs fewer than half of all abortions means that very many women cannot get an abortion early and some cannot get one at all.
It will be said that the number of abortions performed in the NHS has risen over the last 10 years, but the annual percentage declined substantially from 56 per cent. in 1971 to 46 per cent. in 1979 and 1980, whereas the proportion of abortions performed in the private commercial and charitable sector has continued to rise.
There were many attempts during the past onslaughts on the Abortion Act to restrict the charitable sector. The proper provision of facilities under the NHS would have markedly reduced the necessity for women to seek help privately.
NHS abortion provision varies widely, as many women outside this House know to their cost. In 1979 the NHS in Dudley performed only 6 per cent. of all abortions, Sandwell 7 per cent. and Kirklees 11 per cent.; while in Tyneside it performed 92 per cent., as it did in West Glamorgan; the figures in Gateshead was 93 per cent., and in North Devon 94 per cent.
The 1967 Act protects anyone who does not wish to participate in abortions under the conscience clause. Of course, this right must be defended, but it is indefensible that the NHS should not provide treatment for women who are legally entitled to treatment under the law.
Lack of NHS resources in general has comparatively little effect on the number of abortions. The major reason

for the unequal facilities is the attitude of senior gynecologists and, to a lesser extent, of GPs and nurses. The consultant gynecologist can either withhold treatment because of a conscientious objection to abortion or interpret the Act very narrowly—in fact, to strictly medical grounds.
A report by the Policy Studies Institute published this year confirmed that GPs in some areas refer women straight to the private sector rather than attempt to refer them to an NHS hopital where they know that consultants in the area will probably refuse to perform the abortion.
Although the majority of GPs are helpful towards women, there is evidence that GPs holding conscientious objections do not tell women of their attitude and do not inform them that they can get help elsewhere. Some women are, therefore, faced with a blank refusal, and they think that they have no alternative but to proceed with the pregnancy.
The Lane committee found:
For 31 per cent, of…women who eventually had abortions substantial delay was taking place before abortion had been discussed or any decisions made. GPs hostile to abortion contribute to lengthening the time before referral to hospital, either by referring the woman to another GP or by forcing a woman to seek advice elsewhere.
Nurses and midwives can also make it difficult. In the West of Scotland, for example, women find it very difficult to obtain an NHS abortion because of their attitude. The Scotsman reported in June 1980 that at one hospital in Scotland nurses had united in their stand against abortion and en masse invoked the conscience clause. This induced midwives in a nearby maternity hospital to withdraw their assistance in abortion operations because of the increased number of deliveries. There are therefore virtually no NHS abortions in that area, and the chief medical officer expressed the fear that women would turn to back-street abortionists.
Women living in areas where it is difficult to obtain abortions face three options. They can travel to another area, but they must first find it. That causes serious delays which result in the pregnancy being terminated later than necessary. It also means that the areas to which they go find it difficult to cope with the increased number of abortion patients. Alternatively, they can go to a private commercial or charitable abortion clinic, but that means that they must pay for the abortion although they are entitled to it free under the National Health Service. Finally, they may continue with an unwanted pregnancy. They may be unable to afford the fees charged by the private sector, but an unwanted pregnancy can cause grave difficulties not only to the woman but to the rest of her family.
The Bill does not provide for abortion on demand or compel any person to perform or assist in a termination of pregnancy. It does nothing to change the 1967 Act. The decision whether an abortion should be performed remains firmly in the hands of two doctors and the conscience clause remains intact.
The Bill seeks to encourage the equal provision of NHS facilities in all parts of the country. There are at present two options open to areas which find it difficult to perform NHS abortions because of the attitude of doctors or nurses. One is to contract out to private clinics. Several AHAs are sidestepping anti-abortion consultants by arranging additional services on a contractual basis with one of the charitable or commercial clinics.
The other is the establishment of NHS day care centres. This is the most sensible way round the problem and 15 areas have already adopted it. It benefits both patients and staff. Women receive sympathetic treatment early in pregnancy and the operation is less traumatic emotionally and physically. Only those who are willing to work closely on abortion are employed in such units. What is more, it has considerable advantages in these days of financial cuts because the cost of day care abortion is about a quarter of the cost of in-patient abortion.
The Royal Commission on the National Health Service, reporting in July 1979, said:
Equality of access to health services was one of the objectives we set out…and abortion is a conspicuous example of lack of such equality.
I hope that Members of the House will not let either their own prejudices or those of some outside organisations prevent them from looking at the serious disparities of the present situation in a sensible and humane way, and that they will give leave to introduce the Bill. If they do, it will bring relief to women all over the country.

Mrs. Jill Knight: The hon. Member for Barking (Miss Richardson) seeks to amend the National Health Service Act 1977 to ensure that more abortion facilities are made available. I shall not need to take more than a few moments of the House's time to say why this would be wrong.
The Act that the hon. Lady wishes to change is concerned with providing certain facilities. Those facilities are specifically mentioned. They are the care of sick people, dental care, opthalmic care, ambulance services and, perhaps more appositely in this connection, contraceptive services. Nowhere from start to finish does that Act mention abortion because, unlike all the services that it mentions, abortion is not supposed to be available to all comers.
When the House passed the Abortion Act 1967 it was made amply clear that abortion would be available only under certain defined conditions. Time and again, the sponsor and his supporters stressed that it would not mean abortion on demand. Indeed, I think that it would never have been passed had we not been assured that that was the case.
The sole reason for the discrepancies in abortion availability to which the hon. Lady refers is that some doctors operate the law as Parliament intended and will not carry out the operation unless they believe that there are good reasons for doing so, while others abort any woman who asks. That is the difference to which the hon. Lady draws attention. Some doctors consider the facts of the matter with very much more care than others.
For the hon. Lady's Bill to be given permission to proceed the 1967 Act would have to be scrapped and a new one introduced, which would be a straight abortion-on-demand Bill, because if people could not ask for abortion on demand there would be no point in what is being suggested today. Abortion is available for any woman in this country who needs the operation.
It would be quite wrong to pass the hon. Lady's Bill. It would give priority in health expenditure to abortion. Many very serious health conditions—kidney failure, mental health care, cancer and scores of others— have a

far stronger claim for extra money. If the House were to assent to the proposal before us, even though we all knew that the measure could get no further in this Session, the House would be showing its willingness to give priority over all other vital medical needs in order to provide abortion in all areas to all comers. That cannot be right. I urge the House to vote against the Bill.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business):—

The House divided: Ayes 139, Noes 215.

AYES


Division No. 240] [4.17 pm
Johnson, Walter (Derby S)


Allaun, Frank
Johnston, Russell (Inverness)


Archer, Rt Hon Peter
Jones, Barry (East Flint)


Ashton, Joe
Kaufman, Rt Hon Gerald


Atkinson, N. (H'gey)
Kilroy-Silk, Robert


Bagier, Gordon A.T.
Kinnock, Neil


Barnett, Rt Hon Joel (H'wd)
Knox, David


Bennett, Andrew (St'kp't N)
Leighton, Ronald


Bidwell, Sydney
Litherland, Robert


Booth, Rt Hon Albert
Lofthouse, Geoffrey


Boothroyd, Miss Betty
McDonald, Dr Oonagh


Bottomley, Rt Hon A. (M'b'ro)
McKay, Allen (Penistone)


Brown, Hugh D. (Provan)
McWilliam, John


Brown, Ronald W. (H'ckn'y S)
Magee, Bryan


Brown, Ron (Edinburgh, Leith)
Marks, Kenneth



Marland, Paul


Callaghan, Jim (Midd't'n &amp; P)
Marshall, Jim (Leicester S)


Cant, R. B.
Mason, Rt Hon Roy


Carter-Jones, Lewis
Maynard, Miss Joan


Clark, Dr David (S Shields)
Mitchell, R. C. (Soton Itchen)


Coleman, Donald
Morrison, Hon C. (Devizes)


Conlan, Bernard
Morton, George


Cook, Robin F.
Needham, Richard


Cowans, Harry
Nelson, Anthony


Cox, T. (W'dsw'th, Toot'g)
Newens, Stanley


Cryer, Bob
Orme, Rt Hon Stanley


Cunningham, G. (Islington S)
Palmer, Arthur


Cunningham, Dr J. (W'h'n)
Parker, John


Davidson, Arthur
Pavitt, Laurie


Davis, Clinton (Hackney C)
Penhaligon, David


Davis, T. (B'ham, Stechf'd)
Powell, Raymond (Ogmore)


Deakins, Eric
Prescott, John


Dean, Joseph (Leeds West)
Price, C. (Lewisham W)


Dobson, Frank
Rees, Rt Hon M (Leeds S)


Dormand, Jack
Richardson, Jo


Douglas-Mann, Bruce
Roberts, Ernest (Hackney N)


Dubs, Alfred
Roberts, Gwilym (Cannock)


Dunwoody, Hon Mrs G.
Robertson, George


Eastham, Ken
Robinson, G. (Coventry NW)


Ellis, R. (NE D'bysh're)
Rooker, J. W.


Ennals, Rt Hon David
Ross, Stephen (Isle of Wight)


Evans, loan (Aberdare)
Ryman, John


Fletcher, Raymond (Ilkeston)
Sever, John


Fletcher, Ted (Darlington)
Sheerman, Barry


Foot, Rt Hon Michael
Sheldon, Rt Hon R.


Fraser, J. (Lamb'th, N'w'd)
Shore, Rt Hon Peter


Freeson, Rt Hon Reginald
Short, Mrs Renée


Freud, Clement
Silkin, Rt Hon J. (Deptford)


Garrett, John (Norwich S)
Silkin, Rt Hon S. C. (Dulwich)


George, Bruce
Skinner, Dennis


Gilbert, Rt Hon Dr John
Snape, Peter


Grant, George (Morpeth)
Soley, Clive


Grant, John (Islington C)
Spearing, Nigel


Grimond, Rt Hon J.
Spriggs, Leslie


Hart, Rt Hon Dame Judith
Stallard, A. W.


Hattersley, Rt Hon Roy
Steel, Rt Hon David


Haynes, Frank
Stoddart, David


Healey, Rt Hon Denis
Stott, Roger


Heffer, Eric S.
Strang, Gavin


Holland, S. (L'b'th, Vauxh'll)
Taylor, Mrs Ann (Bolton W)


Homewood, William
Thomas, Dafydd (Merioneth)


Huckfield, Les
Thomas, Dr R. (Carmarthen)


Janner, Hon Greville
Thorne, Stan (Preston South)


John, Brynmor
Tilley, John




NOES


Abse, Leo
Dunn, James A.


Aitken, Jonathan
Dunn, Robert (Dartford)


Alison, Michael
Dunnett, Jack


Alton, David
Durant, Tony


Ancram, Michael
Elliott, Sir William


Banks, Robert
English, Michael


Beaumont-Dark. Anthony
Ewing, Harry


Bendall, Vivian
Eyre, Reginald


Benyon, Thomas (A'don)
Fairgrieve, Russell


Benyon, W. (Buckingham)
Farr, John


Berry, Hon Anthony
Fell, Anthony


Best, Keith
Fisher, Sir Nigel


Bevan, David Gilroy
Fitch, Alan


Biggs-Davison, John
Fitt, Gerard


Blackburn, John
Fox, Marcus


Bonsor, Sir Nicholas
Fraser, Peter (South Angus)


Boscawen, Hon Robert
Fry, Peter


Bowden, Andrew
Gardiner, George (Reigate)


Boyson, Dr Rhodes
Garel-Jones, Tristan


Braine, Sir Bernard
Goodhew, Victor


Bray, Dr Jeremy
Goodlad, Alastair


Bright, Graham
Gow, Ian


Brinton, Tim
Gower, Sir Raymond


Brotherton, Michael
Grant, Anthony (Harrow C)


Brown, Michael (Brigg &amp; Sc'n)
Gray, Hamish


Budgen, Nick
Griffiths, Peter Portsm'th N)


Butcher, John
Grylls, Michael


Cadbury, Jocelyn
Gummer, John Selwyn


Campbell, Ian
Hamilton, James (Bothwell)


Campbell-Savours, Dale
Hamilton, Michael (Salisbury)


Canavan, Dennis
Harrison, Rt Hon Walter


Chalker, Mrs. Lynda
Hayhoe, Barney


Channon, Rt. Hon. Paul
Heddle, John


Chapman, Sydney
Henderson, Barry


Churchill, W. S.
Higgins, Rt Hon Terence L.


Clark, Hon A. (Plym'th, S'n)
Holland, Philip (Carlton)


Clark, Sir W. (Croydon S)
Home Robertson, John


Clegg, Sir Walter
Hooson, Tom


Colvin, Michael
Hordern, Peter


Cope, John
Hunt, David (Wirral)


Cormack, Patrick
Hurd, Hon Douglas


Corrie, John
Jenkin, Rt Hon Patrick


Costain, Sir Albert
Jones, Dan (Burnley)


Craigen, J. M.
Joseph, Rt Hon Sir Keith


Dean, Paul (North Somerset)
Kellett-Bowman, Mrs Elaine


Dempsey, James
Kershaw, Anthony


Dickens, Geoffrey
Knight, Mrs Jill


Dixon, Donald
Lang, Ian


Douglas, Dick
Langford-Holt, Sir John


Douglas-Hamilton, Lord J.
Latham, Michael

Townend, John (Bridlington)
Wilson, William (C'try SE)


Townsend, Cyril D, (B'heath)
Winnick, David


Wainwright, R. (Colne V)
Woolmer, Kenneth


Weetch, Ken
Young, David (Bolton E)


Welsh, Michael



Whitehead, Phillip
Tellers for the Ayes:


Wigley, Dafydd
Mr. Martin Flannery and


Willey, Rt Hon Frederick
Mr. Reg Race.


Williams, Rt Hon A. (S'sea W)

Question accordingly negatived.

Lawrence, Ivan
Roberts, Albert (Normanton)


Le Marchant, Spencer
Roberts, M. (Cardiff NW)


Lennox-Boyd, Hon Mark
Roberts, Wyn (Conway)


Lester, Jim (Beeston)
Robinson, P. (Belfast E)


Lewis, Kenneth (Rutland)
Rost, Peter


Lloyd, Peter (Fareham)
Sainsbury, Hon Timothy


Loveridge, John
St. John-Stevas, Rt Hon N.


Lyell, Nicholas
Shaw, Michael (Scarborough)


Mabon, Rt Hon Dr J. Dickson
Shelton, William (Streatham)


McCrindle, Robert
Shepherd, Colin (Hereford)


McElhone, Frank
Shepherd, Richard


McKelvey, William
Silvester, Fred


MacKenzie, Rt Hon Gregor
Skeet, T. H. H.


Macmillan, Rt Hon M.
Speed, Keith


McNair-Wilson, M. (N'bury)
Speller, Tony


McNamara, Kevin
Spence, John


McQuarrie, Albert
Spicer, Michael (S Worcs)


Madel, David
Stainton, Keith


Marlow, Tony
Stanbrook, Ivor


Marshall, D (G'gow S'ton)
Stevens, Martin


Marshall, Dr Edmund (Goole)
Stewart, Rt Hon D. (W Isles)


Marten, Neil (Banbury)
Stewart, Ian (Hitchin)


Martin, M (G'gow S'burn)
Stewart, A. (E Renfrewshire)


Mather, Carol
Stokes, John


Maude, Rt Hon Sir Angus
Stradling Thomas, J.


Mawby, Ray
Taylor, Teddy (S'end E)


Mawhinney, Dr Brian
Tebbit, Norman


Mellor, David
Thatcher, Rt Hon Mrs M.


Meyer, Sir Anthony
Thompson, Donald


Miller, Hal (B'grove)
Thorne, Neil (Ilford South)


Mills, Iain (Meriden)
Thornton, Malcolm


Mills, Peter (West Devon)
Tinn, James


Molyneaux, James
Trippier, David


Montgomery, Fergus
van Straubenzee, W. R


Morgan, Geraint
Waddington, David


Morrison, Hon P. (Chester)
Wakeham, John


Mudd, David
Walker, B. (Perth )


Murphy, Christopher
Wall, Patrick


Neubert, Michael
Waller, Gary


Newton, Tony
Walters, Dennis


Oakes, Rt Hon Gordon
Ward, John


O'Halloran, Michael
Watson, John


Onslow, Cranley
Wells, John (Maidstone)


Osborn, John
Wheeler, John


Page, John (Harrow, West)
White, Frank R.


Paisley, Rev Ian
White, J. (G'gow Pollok)


Patten, Christopher (Bath)
Whitney, Raymond


Patten, John (Oxford)
Wiggin, Jerry


Pawsey, James
Wilkinson, John


Peyton, Rt Hon John
Williams, D. (Montgomery)


Porter, Barry
Wilson, Gordon (Dundee E)


Prentice, Rt Hon Reg
Wilson, Rt Hon Sir H. (H'ton)


Price, Sir David (Eastleigh)
Winterton, Nicholas


Proctor, K. Harvey
Woodall, Alec


Rathbone, Tim
Young, Sir George (Acton)


Rees, Peter (Dover and Deal)



Rees-Davies, W. R.
Tellers for the Noes:


Rhys Williams, Sir Brandon
Mr. Cyril Smith and


Rifkind, Malcolm
Mrs. Peggy Fenner


Rippon, Rt Hon Geoffrey

Orders of the Day — SUPPLY

[25TH ALLOTTED DAY]—considered

Orders of the Day — Motor Vehicle Industry

Mr. Speaker: I have selected the amendment in the name of the Prime Minister.
Before I call the right hon. Member for Salford, West (Mr. Orme), I appeal to hon. Members who are fortunate enough to catch my eye to realise that, apart from hon. Members who will rise in their places, there is a long list of right hon. and hon. Members who have already intimated that they wish to take part in the debate.

Mr. Stanley Orme: I beg to move,
That this House condemns Her Majesty's Government for pursuing economic and industrial policies which have had a disastrous effect on the British motor vehicle industry; notes with concern the rapid loss of employment in this vital industry, its effect on specific regions of the United Kingdom and on the total British economy; and calls for a policy to control the level of vehicle imports and of positive Government intervention to regulate the activities of multi-nationals in this industry.
The motion is important to our economy. The debate takes place against the background of the Government's current industrial and economic policy, which is having a disastrous effect on the British car industry. The evidence is stark. Since the Conservatives came into office over 100,000 jobs have been lost in the motor vehicle industry. Put another way, since the Secretary of State took up his present position 1,000 jobs a week have been lost over two years and the British car industry is weaker than ever before.
The contraction of the motor vehicle industry is inevitably having profound effects on the industries that supply its components. Here, the dependence of many other sectors on the maintenance of the motor industry can be felt. For example, the foundry industry has been devastated. In great part, this is due to the decline in motor vehicle production. Only yesterday, it became known that Rubery Owen, an internationally known company, was threatened by redundancies and closure.

Mr. David Winnick: It is not only a question of the threat of redundancies. Rubery Owen is just outside my constituency and many of my constituents work there. The firm is due to close in September and nearly 1,000 people will be forced on the dole queue.

Mr. Orme: I thank my hon. Friend for having underlined that sombre fact. The importance of the vehicle industry to the British economy and its survival cannot be overstressed. In a country where the manufacturing base continues to contract, the motor vehicle industry and its employees represent nearly one-fifth of insured people in the manufacturing sector.
I would turn to the Government's overall strategy, but there is no strategy. The Government have allowed the industry to decline. They are muddled in the way that they support British Leyland. They have no policy to deal with the multinationals and their captive imports. They appear to be entirely unconcerned about import penetration by the

Japanese and EEC producers. In addition their macro-economic policy is having a disastrous effect on the industry and on employment, at an enormous cost to the public sector borrowing requirement.
The Government's macro-economic policy has been a major contributory factor in the decline of the motor industry. The high-value pound has made it difficult and unprofitable to sell abroad. That is particularly dangerous in the case of an industry that sells 42 per cent. of its output overseas and faces strong competition in the home market. High interest rates have placed a great burden on the motor industry. They, together with falling output, have been a major factor in the fall in investment. Investment in vehicles has fallen by more than one-third in the past two years. The fall in living standards that results from continuing high inflation and rising unemployment is only just beginning to take its toll on the car market.
The Chancellor of the Exchequer is calling for pay restraint in order to save jobs. Workers in the car industry were among the first to suffer pay cuts in the last pay round. However, that has done little to save their jobs, and until the Government change their macro-economic policy there is little hope for the future. It is worth noting that in 1978 the previous United Kingdom president of Ford, Sir Terence Beckett, burst the previous Government's incomes policy by agreeing to a 17 per cent. increase. As secretary-general of the CBI he is now talking about pay increases below 5 per cent. What a change of policy. At the time of the Ford settlement, the Prime Minister, who was then Leader of the Opposition, supported the Ford company. I hope that the House will take note of that.
One question that must worry many hon. Members and that is central to the debate is that of imports. In 1972, the British industry produced nearly 2 million cars. Only 15 per cent. of the cars sold in the United Kingdom were imported. In 1980, the number of cars produced in the United Kingdom had dropped to 655,000 and imports had risen to 56 per cent. Between January and May this year, imports totalled, 53·4 per cent.
I turn to the subject of Japanese imports. On Tuesday 12 May Kenneth Gooding, the motor industry correspondent for the Financial Times, wrote:
The Japanese will possibly be the only mass producers of cars by 1990 unless governments in Europe and North America develop complete motor industry strategies. This is one of the major conclusions in the latest world automotive report from the London-based Economic Models group…The gains may be through direct exports or through Japanese assembly overseas of their components.
The House must ask whether that competition is fair. I claim that it is not. The Japanese do not keep to voluntary quotas. They exceeded their quotas last year and will do so again this year. The Japanese have not only exceeded their quota for the import of light vans; they have doubled it. What do our European competitors do? France allows a 3 per cent. level of imports and Italy less than 1 per cent.
There is a further problem. President Reagan has said that there will be restrictions in the United States. That means that there will be 400,000 surplus Japanese vehicles on the market. What will we do, and what will Europe do about that? I hope that the Government will tell us about last week's discussions in the EEC on Japanese imports into Europe. From what I have read of the Lord Privy Seal's endeavour, the issue has again been deferred—until the autumn. Have there been any firm agreements about


the transfer of surplus Japanese products from the United States to Europe? The House should demand an answer to that question.
Last year, Japanese imports totalled 180,000 cars. British exports to Japan totalled 2,926. Although the Japanese have gone for technology—assisted by their Government—and for robotics, their main competitive edge comes from the supply of cheap components from smaller companies that do not adhere to the "shop-window" labour conditions operated by the vehicle assemblers. Wages are lower, employees are often subject to instant lay-off, working hours are longer and safety standards are lower. Against such competition, we need import controls and ceilings to protect not only British Leyland, but our four major companies and our component manufacturers.

Mr. Nick Budgen: Is the right hon. Gentleman alleging that the sale of Japanse cars here is unfair because dumping takes place and the cars are sold here at less than the cost of production in Japan?

Mr. Orme: I shall explain what I think should be done and how it might be done. The voluntary agreements with the Japanese have not worked. The Japanese are violating them. In addition to the Japanese the EEC is also penetrating the market. EEC imports account for 33 per cent. of total United Kingdom sales. The Government must tackle head on the problem of captive imports.
In 1979 no fewer than 308,000 cars were brought in from the Continent by the big four—237,000 by Ford alone. That accounts for about 32 per cent. of car imports. A change of policy is essential to protect the multinationals' employees in this country.

Sir Julian Ridsdale: Does the right hon. Gentleman agree that if we are to help ourselves against Japan it would be far better to act on a European rather than a national basis?

Mr. Orme: That is a fair question. I have asked it of the Secretary of State. Meetings take place but no decisions are taken. When we entered the EEC we were told that we would be able to control the multinationals, but that is not so in practice.
The Ford Motor Company in the United Kingdom last year made nearly 70 per cent. of the total Ford profit. It paid £135 million in dividends and loaned its parent company £229 million. That looks attractive on the surface, but there is a serious threat of major cutbacks in Ford and of an extension of captive imports from Germany and Spain which could undermine the United Kingdom company.
There has been a contraction in the Peugeot company. About 30,000 people were employed here by Peugeot-Talbot in 1976. Now the firm employs only 10,000. We have experienced the loss of one of its major factories. We welcome the new model which is to be produced at Coventry with the creation of 200 jobs. However, that is a drop in the ocean in terms of the figures that I have given.
Recently I met trade union officials and shop stewards from General Motors. They fear that General Motors, which is pursuing an aggressive international campaign against Ford and the Japanese, might transfer European production to Austria and Spain. Perhaps the Minister of

State will comment on that later. The fear is that General Motors here will become an assembly unit only with no basic production. That must be opposed.

Mr. Barry Porter: Is the right hon. Gentleman aware that James McDonald, of General Motors has said
As far into the future as I can see General Motors will be building and selling cars, trucks and automotive components in Britain.
Has the right hon. Gentleman any reason to believe that that is not true?

Mr. Orme: The trade unions are anxious because they believe that the company will still assemble but not make cars in Britain.
British Leyland has faced an almost impossible task in the last two years. The Secretary of State has given substantial aid with one hand and taken it away with the other. The aid has been given reluctantly and with bad grace. The Secretary of State called it "outdoor relief". That is no way to conduct business with a major British company.
High interest rates, a direct consequence of the Government's overwhelming interest in monetary policy, have ruined much of the car market. The demand for Maxis and Princesses has plummeted. Cowley is working at only one-quarter capacity. Commercial vehicle sales have collapsed, and it was announced the other day that a plant at Wellingborough is to close.
The excessive strength of sterling between 1979 and 1981 cost British Leyland more than £1,000 million in negative cash flow. That must be taken into account, The reduction of demand at home and the Goverment's crazy policy towards petrol prices means that British Leyland is being asked to take part in an obstacle race which it cannot win.
It is interesting to contrast the Government's policy with the statement made before 1979 when "The Right Approach to the Economy" said that business men and mangers were crying:
For heaven's sake, get off our backs, stop chopping and changing and monkeying around, and leave us to get on with our jobs in peace!
It would be interesting to hear Sir Michael Edwardes' view, or that of the Ford chairman, on the stability produced by the Government in the last 25 months.
The House has spent much time discussing British Leyland. Much has been said about industrial relations. It is worth putting on record that in 1981 to date, over 99 per cent. of available working hours have been free from any form of industrial dispute. That is creditable.
The ability to finance research and development into vehicle design and production technology is vital for the future of the British motor industry. High interest rates and the absence of Government support for R and D on the scale of some Continental countries has prevented British companies from pursuing R and D to the necessary extent. The French, Germans and Italians have initiated substantial programmes into the development of energy-efficient cars. In all three countries such research is sponsored by Government. The British Government must ensure that the United Kingdom motor vehicle industry does not fall behind the other vehicle producing countries, particularly in research and development assistance.
Let us examine intervention. In Western Europe and Japan there is direct Government intervention on behalf of the motor industry. The Governments of our competitors


protect their motor industries with import controls and help with research and development. They ensure that a healthy industry is the basis of a modern industrial economy. The Secretary of State washes his hands of all that and says that industry must resolve its own problems. He says that the Government should not intervene, although one firm after another closes.

Mr. David Model: The right hon. Gentleman referred to import controls and protection. He is advocating a measure of control. Is he advocating import controls on finished vehicles or on the parts? It is vital that we should know whether he believes that controls should be put on parts, because that is bound to jeopardise British jobs.

Mr. Orme: When we set import ceilings we shall have to examine both components and cars. I am now talking about cars. I hope that that is a straight answer.
I turn to the question of Labour's alternative economic strategy for cars. We are often criticised for not putting forward an alternative policy. Even if the Government are not prepared to put our policy into practice it is important to spell it out.
Labour's policy for the car industry has four strands. It has a macro-economic policy. It has a trade policy which involves import controls. It deals with the multinationals and with British Leyland.
I shall deal with import controls first. A sustained recovery of the United Kingdom car industry cannot be achieved without firm controls on imports. Without such controls, public investment will go down the drain as the home market is cut away. Past experience suggests that to restrict car imports from one country, or even from several countries, would be ineffective, as that country's supply would be replaced by imports from elsewhere. For example, although the Japanese car manufacturers agreed in 1977 to limit their proportion of the United Kingdom market, overall import penetration has continued to rise as imports from the EEC especially have increased substantially. Therefore, we must establish firm import ceilings on all car imports, regardless of origin.
That means not that that we stop all car imports but that we should have quotas with producers and take into account our domestic market. Manufacturers can gear themselves to what they can export to other countries, including the United Kingdom, and we must take our exports into account. There must be a balance. Why, when other countries have such a policy, do we not? The other countries are successful. They still export materials, manufactured goods and cars, and simultaneously control their home market.
The key factor in a macro-economic policy is to ensure that industrial policy is not frustrated by the overall economic policy. Labour will harness industrial policy to increase output and employment. That means more public expenditure to help the manufacturing sector as well as other areas. A sensible policy will ensure that industrial aid, help for public investment and job preservation does not go to waste. That will have a dramatic effect on the home car market.
Labour will seek firm agreements with multinational companies in which the question of captive imports must be subject to negotiations between the Government, the companies concerned and the trade unions. The

introduction of planning agreements with statutory powers is essential. Those agreements should not be similar to those made with Chrysler (UK) in 1976, as taken over by Peugeot, which this year have been disregarded. They should be agreements which will not be so easily broken. Some of our Western European competitors can arrange suitable agreements with the multinationals, so why cannot the United Kingdom? That sort of agreement would be in the interests of the multinationals in this country, their products and their employees.

Mr. David Stoddart: I am interested in what my right hon. Friend says about import controls and managed trade and also a macro-economic policy, with which I agree. Is it not a fact that as long as we remain in the EEC it will not be possible for us to pursue that sort of policy? We shall not be able to impose import controls and, as we have already seen with assistance to British Leyland, the Commission as well as the Government are getting on the industry's back. Can I have my right hon. Friend's assurance that we shall deal with that by withdrawal from the Common Market?

Mr. Orme: I cannot write the manifesto at the Dispatch Box—[HON. MEMBERS: Why not?]—but under pressure, I shall have a go. I think that the EEC policy is detrimental to the British economy and to manufacturing industry. I hope that when the next Labour Government are elected we shall withdraw from the EEC at the earliest opportunity.
Inward investment is a little problem that the Minister and I have discussed on a previous occasion. We are not opposed to it, but we believe that the country has the right to make an agreement which is in the interests of the economy as a whole. If the proposed Nissan investment is to help the survival of the components industry, at least 80 per cent. of the company's components should be manufactured in the United Kingdom. That is a positive proposal and I am sure that the Japanese would make such a proposal were our positions reversed. When the Minister of State made his original statement he spoke about local involvement as being between 60 per cent. and 80 per cent. We did not realise then that local involvement meant the EEC as well as the United Kingdom.
Continued Government support for British Leyland is essential, for the loss of what in world terms is a medium-sized car firm would have a devestating effect on British employment and the economy. We are completely opposed to selling sections of BL—the so-called winners—which would speed up the demise of the company. We welcome the link with Honda, but there must be firm controls over components so that there is a working agreement.
It is worth mentioning that, directly and indirectly, over 700,000 jobs are at stake in the survival of British Leyland. As a nation we cannot allow that company to fail.
I have presented a coherent policy to the House, which consists of an expansion of our economy, coupled with negotiations with our trading partners to limit import penetration, planning agreements with multinationals and sustained support for British Leyland. That is a positive alternative strategy to the policies being pursued by the Secretary of State and his disastrous Government.

The Secretary of State for Industry (Sir Keith Joseph): I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
this House supports the Government's economic and industrial policy; regrets the British motor vehicle industry's long decline in competitiveness which reflects the past performance of managements arid work-forces as well as the interventions of previous Governments; notes that Her Majesty's Government have provided substantial funds to the industry at the expense of taxpayers and ocher sectors of industry and commerce"—
did I hear the hon. Member for Norwich, South (Mr. Garrett) laughing at taxpayers? They are the people who pay the subsidies—
welcomes the industry's recent improvements in productivity, the investments in the United Kingdom by multi-nationals, and the voluntary restraint agreement with the Japanese; and believes that jobs and prosperity in the industry can only be assured if managements and workforces satisfy sufficient customers with the quality, price and design of their products.
The amendment answers the shallowness of the Opposition motion and brings out some of the main features that we should be debating. I apologise for the length of the amendment, because it outnumbers the words used by the right hon. Member for Salford, West (Mr. Orme) to describe the Opposition's policy, as he called it, towards the motor vehicle industry. He had the effrontery to claim that the few words that he used relatively casually at the end of his speech met the problems. The House will probably agree that he shirked every problem in those brief and superficial remarks. They give no explanation of what, heaven help us, a Labour Government would do. The right hon. Gentleman evaded the issue totally.
The right hon. Gentleman's speech was delivered in an agreeable and patently sincere manner, as is characteristic, because he is a man whom we all like. But it failed to recognise the central issue of our vehicle industry. I refer to competitiveness—in design, in quality, in price, in services and in delivery. In short, I mean competitiveness in value for money. I know that the right hon. Gentleman will agree that today's world, especially for the vehicle industry, is a very tough, competitive place.
We could debate happily for several days who was responsible for the decline in competitiveness. But there are three principal competitors for responsibility for the decline. They are successive Governments, successive managements and successive work forces. In one situation, it is a mixture of the three. In another situation, it is one or two of those three. But I do not think that anyone can deny that we have been losing competitiveness steadily in most of our vehicle industry for years.
It is no use the right hon. Member for Salford, West lambasting the present Government's policies. The decline of the vehicle industry has been going on for years. Through all economic weathers—strong pound and weak pound, economic squeeze and economic boom—the British vehicle industry has declined in competitiveness. Year after year, for the last six years, vehicle production has fallen, our exports have declined and imports have risen. However, demand has stayed relatively and almost surprisingly buoyant. The productive capacity has been there with, it is true, varying vintages of investment. But British customers have chosen to buy smaller and smaller quantities of British-produced cars. Our share of our own market and of the world market has fallen.
I am the first to agree that life for British industry has been very difficult for many years, and not least for the

vehicle industry, in which I include car, commercial vehicle, bus and component manufacturers. But I do not believe that the Opposition can dismiss the problem as one of inadequate investment. Investment has been relatively substantial, including the contribution by multinationals to meet the losses of their British plants.

Mr. John Silkin: What about the Ryder report?

Sir Keith Joseph: I said "relatively substantial", bat not altogether satisfactory investment. During the years which the Ryder report covered, there had been significant, substantial investment, but, as so often happens with British investment, it had been overmanned and underused.
Scope for cutting costs in the British vehicle industry and in some cases for paying more heed to new models has been very large. In general, overmanning has been rife, and overmanning must reflect on management, but it also reflects the shortsighted policies of unions and shop floor representatives sanctioned by strikes and the threat to strike.
The days lost by strikes in the British vehicle industry during the period in office of the last Labour Government ranged from five times the industrial average to 15 times the industrial average per annum. This was during a period when the pound was low and a period when the pound was high, and when a Labour Government were in office.

Mr. Geoffrey Robinson: We are debating the present Administration's policies and performance and not those of the previous Government. Will the Secretary of State explain why, in two years of a buoyant market, with a very low percentage of strikes, a massive increase in productivity and a massive elimination of restrictive practices—and that is the view of Sir Michael Edwardes—British cars have still not been able to take full advantage of the market? The answer is that the Government are wrong and that sterling and interest rates have been far too high.

Mr. Orme: They have cost British Leyland £1,000 million.

Sir Keith Joseph: I fear that the progress which BL still has to achieve reflects the failure of past managements to introduce new models and the depth of the failure of competitiveness in BL from which the company is only just beginning to emerge. All concerned deserve full credit for the improvement.

Mr. Robinson: Will the right hon. Gentleman answer the question?

Sir Keith Joseph: I am answering the question. I shall repeat what I said in case the hon. Gentleman did not hear. If the company had had a full range of new models and had productivity been less low, from which I am delighted to say some recovery has occurred, British Leyland would have been able to sell more cars at home and abroad, despite sterling, and perhaps even to make a profit.

Mr. Les Huckfield: Rubbish.

Sir Keith Joseph: The jobs which have been and are being lost in the British vehicle industry perhaps should never have existed. If they had not existed, if overmanning had been resisted and if restrictive labour practices had been dealt with earlier, the firms would have been more competitive, would have sold more products and would


have made a profit. What is more, other and more jobs would have come into existence in the car industry and in other industries and services.
I turn to an aspect of this lack of competitiveness which is especially sad. The right hon. Member for Salford, West referred only briefly—I make no criticism, because he covered a great deal of ground in his speech—to what has happened in Scotland and on Merseyside.
It is poignant that vigorous regional policy implementation, by Tory Governments more often than not, steered the car industry to areas with high unemployment. There were very high hopes in Scotland and on Merseyside, and there was bitter disappointment in the West Midlands about IDC controls sincerely implemented by successive Governments, including Tory Governments—we now see, perhaps, over-implemented. There was bitter disappointment in parts of the country where the companies concerned probably would have preferred to expand or invest. Today we witness the results. Alas, the high hopes in Scotland and on Merseyside have been disappointed, and I say that with no joy.
It is not possible or sensible to put all the blame on management for those disappointed hopes. I start on the assumption that no one is perfect. Managements are not perfect, and they vary in their skills. But in a wide-ranging speech the right hon. Member for Salford, West scarcely referred to trade unions, other than to say that they would be partners in new planning agreements.
The right hon. Gentleman's speech was very much weakened by his failure to recognise the part that imprudent policies by unions and shop floor representatives had played in the decline of the competitiveness of the British vehicle industry. I say again that it is not reasonable to put all the blame, always and only, on Governments and on managements. Above all, overmanning and bad working practices have been most to blame for the decline. Especially am I not omitting the failure to bring in new models, which clearly is a management responsibility, though it must have some relation to the profit which firms were allowed to make after the wage claims and the working practices had taken their toll.

Mr. Orme: Before the right hon. Gentleman leaves the subject of Linwood, I should tell him that I went to Scotland when the firm was threatened with closure—it has, of course, since closed—and found that production, productivity and co-operation there were of a high level. So that could not be blamed on the unions or the management.

Sir Keith Joseph: The right hon. Gentleman is absolutely right, certainly in recent years. However, before the improvement that took place in recent years, there was a long story of disasters, when industrial relations and co-operation between management and work force were desperately bad.

Mr. Dennis Skinner: The Minister said that past Governments, including Tory Governments, steered industry to different regions, and he mentioned Scotland and Merseyside. We know that the right hon. Gentleman is a purist in these matters—or at least he was when he was in Opposition; now he is not quite so much a purist, but is rather blurred at the edges. Although we know that he

has got rid of certain regional policies, but not all, I hope that he will now tell the House unequivocally that this Government will do no more steering of industry in future.

Sir Keith Joseph: I must ask the hon. Member to read the two-hour investigation on me that the Select Committee conducted on regional policy. We have kept the requirement for IDCs for projects of over 50,000 sq ft precisely so that the Government can make a decision in each case that involves a large investment. However, in general, we all recognise that the ban on developments in areas where managements and investors particularly wanted to go may have damaged the regions, as well as the chosen areas, by reducing the vitality and health of the whole economy on which the regions most depend.

Mr. Budgen: Does my right hon. Friend agree that the West Midlands is disadvantaged not only by the effect of the IDCs but by the effect of the grants that are given to the regions? In view of the tears that my right hon. Friend shed a moment ago, are we to understand that those grants are now to diminish?

Sir Keith Joseph: No. We have said that we are keeping the main outline of our regional policy during this Parliament. So grants are being maintained. The House is aware that we have redrawn the map of assisted areas.

Mr. Skinner: I asked the Secretary of State to be unequivocal. He wants to give the House the impression that damage is done when industry is steered to the regions—with specific reference, in this case, to the car industry. There is plenty of evidence to show that steering is taking place. Where does the right hon. Gentleman stand?

Sir Keith Joseph: I have made it plain that we have largely abolished the requirement for industrial development certificates. There is no ambiguity about that. We have kept the grants in the regions. My hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) rightly said that those grants have an effect on location decisions. There is no ambiguity about that whatever. My own judgment is that our present mix of policies is not the optimum, and we may have to consider a change. However, that is our policy at present.
I come now to the saga of British Leyland. I pay tribute to the Labour Government for their approval of the excellent appointment of Sir Michael Edwardes as the chairman of that company.

Mr. D. N. Campbell-Savours: rose—

Sir Keith Joseph: No, I must get on.
The Labour Government acknowledged that BL was overmanned. It is a shame that that Government did not encourage the then management to reduce the overmanning at a time when jobs were more plentiful. Successive Governments have spent hundreds of millions of pounds of taxpayers' money over the past 20 years in encouraging and helping the vehicle industry. Those hundreds of millions of pounds were only a proportion of the total amount of money spent by the firms in the vehicle industry, and more taxpayers' money in commitments that have already been made still has to be paid.
That spending of taxpayers' money is not costless in terms of jobs. Every extra pound that is raised from the taxpayer for investment in the vehicle industry reduces by £1 the buying that the taxpayer would have done elsewhere in the economy, and somewhere in the economy a job is


marginally more precarious because of that shift of money. When one is dealing with hundreds of millions of pounds, the jobs that are being created by the extra spending may well have been balanced by the jobs lost by the extra taxation or the increase in interest caused by the higher borrowing.
The Government decided to back BL. It seemed, on balance, that there was a prospect of a change for the better. Now there is increasing evidence that a change for the better is occurring before our eyes. We can be encouraged by the punctuality and the quality of the new investment in Roadtrain—the group of trucks—and the new Metro. British Leyland kept to its dates. It produced a quality of investment that has been widely admired by people who are competent to judge.
The design of both Roadtrain and the Metro has met widespread approbation. Roadtrain was born at a time when the market for trucks had fallen savagely. Therefore, I cannot talk with much satisfaction about the market share that it has won. However, as a product, Roadtrain has been welcomed. Metro has established its place by a substantial market share, and I am sure that we all hope that it will hold it and improve it. Now the company has set in hand investment for the mid-car—I think that the code name is LMIO—and for a new Jaguar model. We hope that they will be as successful as the Metro and Roadtrain appear to have been.
There is further evidence of a change for the better, other than the new models. There appear to be more sensible work practices in BL and more sensible pay settlements. There appears to be rising productivity. I understand that in the first five months of this year BL produced the same output as in the first five months of last year—here I think I am talking about cars—with 20 per cent. less labour. So there is a significant increase in productivity. Of course, I recognise, as the right hon. Gentleman said, that the exchange value of the pound has made trading more difficult. However, BL is rightly making determined efforts to achieve the plan. As a result of those determined efforts to become profitable, viable and to cease to be a burden on the taxpayer, painful decisions are having to be made.
The House will want to know what is happening about disposals. Sir Michael Edwardes and his colleagues have committed themselves to a policy of seeking disposals and collaboration for part or, indeed, perhaps the whole of their business. The Government are firmly of the view that decisions about what to dispose of, at what price, when and to whom must be left to management. The House will be aware that Prestcold has been sold. An example of collaboration is the work with Honda on the Acclaim, which will come to fruition in a new model later this year.
I turn briefly to other parts of this huge subject. Commercial vehicles used to be a thriving part of the British industrial scene. They are now suffering from the obsolescence of their models—I refer especially to the gap that British Leyland has recently filled with the Road train—and by an especially sharp decline in demand all over the world. That sector is also grappling with the need to improve productivity. Other car and truck companies are—as is BL, although from a less worrying base—striving with falling demand and fierce competition. They have scope for improved productivity and lower unit labour costs. Some achievements have been registered, but there is much more to be achieved.
As the right hon. Gentleman rightly said, the supply industries are suffering as their clients suffer. The foundry industry is an example of that. The supply industries depend desperately upon the success of the vehicle industry. They must hope, as we all hope, that BL and the other vehicle groups will, through higher productivity and greater competitiveness, re-establish a proper and profitable share of the market.
I turn to components, which is an important sector of our industry. It is going through the same struggle but is still, I am glad to say, registering a large trade surplus. I am not a technical man, so I cannot stand up to questioning on the details. I understand that there are some impressive innovations in the components sector—for example, Lucas has a market lead in diesel fuel injectors with its Microjector. We are all glad to know that Cummins is developing a large expansion of diesel engine production at Daventry. I have only picked out two of many to which I could have referred.

Mr. Winnick: rose——

Sir Keith Joseph: I shall not give way to the hon. Gentleman as I did not give way to the hon. Member for Workington (Mr. Campbell-Savours).
One factor was not mentioned in the right hon. Gentleman's speech, and I wish to ensure that the House pays proper heed to it. It is not only important that there should be secure jobs and that there should be competitiveness; it is crucial that there should be profit. It is from profit that security, investment and expansion come. It is indirectly from profit that the pay of those who sit in the House—including the hon. Member for Bolsover (Mr. Skinner), who is always intervening from a sedentary position—ultimately comes.
The right hon. Gentleman referred to the importance of research and development. He was right. He said that other countries put a great deal of taxpayers' money into research and development. We cannot compete with other countries that are more prosperous, successful and competitive. However, we have helped research and development. We have schemes—some of which we kept from the right hon. Gentlemen's time in office—which enable us to contribute 25 per cent., or some such portion, to research and development schemes proposed by firms, including vehicle firms, largely on the basis of the use of their own money.
I hope that despite the gloomy picture from which we began—

Mr. Campbell-Savours: rose——

Sir Keith Joseph: I am anxious to continue. I am in danger of keeping the House too long.

Mr. Campbell-Savours: I wish to raise a point about imports..

Sir Keith Joseph: The hon. Gentleman has made his point. I am about to turn to the subject of imports. I have several more pages of notes.
I hope that in our home output we are witnessing the beginning of a trend towards profitable competitiveness. The continuation of that trend will depend upon the Government not relaxing their general policies, upon management continuing to strive effectively, upon management tirelessly explaining the facts of economic life to their work forces, and upon work forces continuing to realise that the security of their jobs and the scale of


their earnings depend precisely upon being competitive enough to attract more British buyers for the products that they help to make.
I turn to the so-called bogy men—namely, the multinationals. They are not bogy men at all. On balance, multinationals are highly beneficent organisations. I am not claiming that their purpose in life is only to be beneficent. I am claiming that, in general, they can make the profit on which they depend for the savings of investors and our pension funds only if they serve the customer and those who work for them. I am not claiming that every multinational, in every one of its activities, is perfect. However, I claim again that on balance they are highly beneficent.
It is unavoidable that multinationals, in deciding where to locate and expand their investment, are bound to take into account the relative efficiency of different sources of supply. It would be odd, and an ill service to our pension funds that invest in the multinationals, if they did not take account of the efficiency and profitability of sourcing from different countries. Once again we return to the basic importance of profitable competitiveness. That should be the theme of the debate.
The right hon. Gentleman uncovered a formidable weapon. He said that any future Labour Government—heaven help us—would deal with multinationals by planning agreements. I ask the House to recognise that in a turbulent trading world, with turbulent exchange rates and turbulent conditions, asking companies to commit themselves to precise production and investment targets several years ahead cannot be realistic. Companies would not have the resources to carry out their commitments if they were foolish enough to make them.

Mr. Skinner: What about the common agricultural policy?

Sir Keith Joseph: The hon. Gentleman intervenes once again from a sedentary position. Not everyone in the House is desperately in favour of the CAP, is he? We would not wish to commit ourselves to imposing upon our vehicle industry the regulations that govern the CAP.

Mr. Orme: On the subject of multinationals, will the right hon. Gentleman address himself to the fact that countries such as France, Austria and Italy can arrive at agreements with multinationals that are in the interests of both their economies and the multinationals? Why cannot we make similar agreements?

Sir Keith Joseph: I am not absolutely convinced that we wish to emulate Italy. The French have done very well economically during the past 20 years—very well indeed. But that is because their successes exceed their failures. A number of their failures have been associated with attempts to corral and control multinationals investment. We have absolutely no way to make multinationals come to Britain, or to make them stay here. We know that, even if some hon. Members are not always in favour of every multinational, the people, local authorities and the unions of Britain give a warm welcome to new multinational investment in Britain. The welcome given even to the announcement that Nissan would be considering an investment in Britain indicates that what I am saying represents the facts. Nissan would be widely welcomed if

it decided to come here, provided that it sourced an acceptable amount of its requirements locally in EEC terms. That must be considerable to be acceptable.

Mr. Barry Jones: Is the right hon. Gentleman aware that his right hon. Friend the Secretary of State for Wales is reported as having said yesterday in North Wales that he did not think that Nissan-Datsun would locate in Wales? Is he aware of the mass unemployment in my constituency and the great interest in the location of Nissan-Datsun? Can he give us any information about the proposal?

Sir Keith Joseph: We genuinely do not know what Nissan will decide about investing in the United Kingdom and, if it does, where it will decide to invest.
The right hon. Member for Salford, West referred to import controls. Statutory or legal import controls would be self-defeating. The right hon. Gentleman would be quick enough to complain if large numbers of employees working in exporting industries were driven out of work and lost their jobs because of barriers erected as reprisals for import controls set up by the British Government. Moreover, if it be true—I do not think that anyone can deny this—that our problem is lack of competitiveness, is it likely that protecting firms that should be improving their competitiveness will encourage them to become competitive? We should become industrial cripples and poorer and poorer with fewer and fewer decent real jobs if we embarked upon the route of import controls.

Mr. Skinner: The Government have done it with coal.

Sir Keith Joseph: Many of us think that it is not good for the economy to have import controls except where they are thoroughly justified temporarily by providing time to adjust. We accept that there are instances where time to adjust is needed. That is why we welcome the voluntary restraint agreement that our vehicle industry has aquired at with Japan.
I was asked by the right hon. Member for Salford, West about the reaction in Europe to the announcement that the Americans and the Japanese have reached a voluntary restraint agreement and that the surplus of cars that has gone to America might be unloaded to Western Europe. The Japanese are aware of the growing anxiety in Europe about increasing imports of cars from Japan and of the pressures for protection that are beginning to mount. We should much prefer to see the problem tackled by Japanese investment in Europe than by legal import restrictions that could endanger present international trading arrangements.
I was asked by the right hon. Member for Salford, West why Britain does not control imports while other countries impose controls. Britain is far more dependent on external trade than any other large trading community. We export two and a half times as much as a proportion of our gross national product as the Japanese.

Mr. Campbell-Savours: rose——

Sir Keith Joseph: We export a huge proportion of our GNP and we still have a substantial net export in manufactures.

Mr. Geoffrey Robinson: rose——

Sir Keith Joseph: The fact that other countries have import controls perhaps reflects a lack of trading exposure


compared with that faced by Britain. In some instances the operation of controls might be unwise in terms of their own interests.
I return to the central issue of profitable competitiveness. There are faint signs, which we must not exaggerate, that the climate in the vehicle industry is conducive to a move back towards the desirable goal of profitable competitiveness. We must hope that that trend will continue until the vehicle industry becomes, as its talents enable it to become, profitably competitive. When that happens, we shall have more secure jobs and a much healthier economic base.
I ask my right hon. and hon. Friends and Opposition Members to compare the motion with the amendment and to reject the motion and to vote for the amendment.

Mr. Geoffrey Robinson: I am sure that it was a pleasure for the House to hear the Secretary of State in a more relaxed and less tortured frame of mind. We had that pleasure this afternoon. However, I cannot allow his speech, which was tolerant in its tone and forthcoming in its content, to pass without a correction. It is a sad reflection on the performance of our manufacturing industry that we are no longer a major net exporter of manufactures. That marks a serious trend for a country that must live on its exports and manufactures in the long term. A serious situation has already eventuated.
Secondly, it is pleasing that the right hon. Gentleman now understands that there can be three parties to an industrial problem—the Government, management and the unions. The House will welcome the right hon. Gentleman's conversion and the fact that today he did not choose to allocate blame. He seems to be making some progress. On 28 January, in a speech to a London seminar on profits and sources of investment, he said without equivocation that primary responsibility for the lack of performance rests on trade unions. We congratulate the right hon. Gentleman on the progress that he is making towards understanding our industrial problems.
The purpose of the motion is to allocate blame, and the blame rests with the Government's policies over the past two years. Mercifully, the right hon. Gentleman did not try to tell us about the world recession and every country suffering the consequences to the same extent. That myth has been largely exploded. There has been massive destocking and companies have suffered from that. The NIESR estimates reveal that the growth of world trade to the second quarter of 1981 was nearly 9 per cent. Retail car sales over the past three years have averaged an all-time high. In 1978 there was an increase in retail sales in the United Kingdom of 5·6 per cent. In 1979 it was 4·6 per cent. In 1980 it was 0·06 per cent. The figures indicate that to May 1981 there was an increase of 2·5 per cent. There is no real evidence of a massive recession apart from the destocking that has taken place, which is not the whole story.
Why is it that Britain uniquely has suffered to such a massive extent from unemployment and reduced output? There are two interlinking reasons, stemming from the Government's policies, that explain the difference between Britain's performance and the performance of our major European competitors with which it is most appropriate to draw comparisons. First, there were the lunatic high interest rates that were pursued for two years,

which have only recently been reduced, and the high rates of sterling that went with them. I note that some Conservative Members dissent, but I think that there is general agreement, including even the City, that the policy was damaging.
The Secretary of State does not have to take my word for that accusation. He and Conservative Members generally may find time to read the Greenwell bulletin. It makes it clear that during the Government's first year, interest rates should have been reduced much more quickly. Greenwell and Co. is a bastion of monetarist policy and its bulletin cannot be said to form part of the Labour Party's admirable programme to which my right hon. Friend the Member for Salford, West (Mr. Orme) referred. The remarks of the Governor of the Bank of England suggest that a hand is needed on the tiller to bring down interest rates.
What has happened to sterling? There is no industry or company that could have survived with sterling at $2·45 or $2·40. I understand that it is at $1·91 to-day. $2·45 was the high point of sterling in the first year of the Government's policies on interest rates.

The Minister of State, Department of Industry (Mr. Norman Tebbit): The hon. Gentleman says that no company could have survived with sterling at $2·40 or $2·45. It is not that many years ago that sterling was at $2·80 and companies survived. The hon. Gentleman had better ask himself what has happened to our competitiveness in the meantime, and who was responsible.

Mr. Robinson: We are dealing with this Government's policies. It is as simple as that. That is what the motion is about. Let us go back to the previous Tory Government, when the rot started to set in. Let us go back to 1956, when the Germans overtook us, and to 1960, when the Japanese overtook us. There have been 13 years of Tory rule, and where has it got us? We are dealing with policies——

Mr. Anthony Beaumont-Dark: Where is it getting us now?

Mr. Robinson: It is getting us into a serious situation.. I shall explain the reason to the hon. Gentleman, if he has the courtesy and patience to listen. We are establishing that the reason why he have had a massive rise in unemployment and a massive drop in output in the motor car industry is this Government's policy on interest rates and the exchange rate. I shall take any intervention from the hon. Gentleman, but he does not have to listen to me. He should listen to Sir Michael Edwardes, who, after all, is the darling of the Prime Minister. His performance has been extolled by the Secretary of State. I shall qualify my remarks about sterling to the extent that few companies could have continued to survive at $2·45.
What has been the effect of the Government's policies? My right hon. Friend the Member for Salford, West gave the figures for the country as a whole. He quoted the figures of 100,000 redundancies in the industry, which included the component-related sector. Last year alone, there were redundancies totalling 37,200 in the motor vehicle industry in the country as a whole, which is about 7 per cent. of the total work force. In the West Midlands, which I have the privilege to represent, there were 11,242 redundancies in that industry, which represents 15 per cent. of the total redundancies in the West Midlands, so heavily is our area committed to and dependent on the car


sector. If one allows for the normal correlation of one person employed in the component sector for every person employed in the car sector, that figure is doubled, and one finds that no less than 30 per cent. of redundancies in the West Midlands are accounted for by the redundancies in the car industry, which are directly related to this Government's policies.
I shall now specify the argument and deal with Leyland alone. The Secretary of State needs to address himself to the question why, despite a 30 per cent. increase in productivity and the fact that only 1·4 per cent. of man-hours were lost last year through strikes, between 1979 and 1980 than was a 20 per cent. reduction in production. With sterling where it was, interest rates where they were and despite their being good models on the market, they could not be sold and therefore there was a dramatic drop in production. The drop in production is mirrored not just in the car industry but in industrial output as a whole, in which there was an unprecedented drop of 15·5 per cent., which is worse than was reached in the two worst years of the world recession—1929 and 1931.
If we take the United States Department of Labour statistics, which are the only ones that give a comparative basis for all countries, we find that unemployment in the United Kingdom now stands at 11·7 per cent. compared with Germany at 4·3 per cent., France at 7·7 per cent.;and Japan at 2·2 per cent. Does anyone in his right mind believe that any other country would allow its industrial output and employment to be so adversely affected in any two-year period as has happened under this Government? It defies belief that we could have accepted that.
What do we have from the Government by way of a reply to this disastrous and tragic period in our national industrial history? We have the fatuous remark in the Government's amendment to the motion that they deplore the interventions of previous Governments. Does anyone believe that we would still have a motor industry had it not been for the interventions of previous Governments? Does anyone believe that the motor car industry would not have gone exactly the same way as the motor cycle industry, or that the motor car industry would be here but for the Government money that has gone in in the wake of the failure of the private sector? Let that be clearly recognised. That industry was like the aircraft industry and most of the other industries that have been nationalised. It is only when private management has failed to invest, produce and to develop the new products that the Government are called in to bail out an industry. That is happening in the machine tool industry. It happened in the motor cycle industry. We came within a hair's breadth of that happening when the Labour Government stepped in for the motor car industry.
I believe that we can find common ground, in that the Opposition do not believe that labour relations and attitudes reflect a real and genuine improvement, much though we would like to see it. This is particularly the case amongst those in the car industry, especially at British Leyland, who have had to take wage settlements below the national average and have seen their position in the wage league drop from being average a couple of years ago to only 90 per cent. of the national industrial average. There has been a confrontational policy and an acquiescence. There has been a drop in strikes. Those things have led to certain improvements in certain areas. We urge upon the

management of Leyland, which has had a remarkable series of confrontational successes, as it sees it, that now is the time for conciliation. Now is the time for the management seriously to sit back and think about the next stage in labour relations. If some form of just and inevitable retribution is not to come, we warn it that the attitude on its side must change to conciliation and compromise.
That is one essential element that will be needed to make a success of British Leyland, which is the only nationally owned motor vehicle manufacturing company. We must ask ourselves what it will need to succeed. Two fundamental, further points are needed. It will need a form of protection—for want of a better word—and a form of control on imports. It is no good Opposition Members saying that we should control or bash the Japanese, and all our problems would be solved. It is not as simple as that. We know that this year and perhaps in previous years the Japanese have exceeded their quota of cars a little. It has been more or less effective. I believe that the quota has been set at too high a level and that it should have been decreasing. Nevertheless, it has worked well, more or less.
The real problem comes from the rest of the world—from the East Europeans and the EEC. It is inevitable for cars, as for the rest of our manufactured goods, that we should have a system of variable import ceilings. That is an inherent part of the Labour Party's programme. Those ceilings will have to come if we are to build on the success that is beginning to emerge as, at last, Government investment is being put into the industry. Let us not forget that the French, the Japanese and the Italians also have import controls. Let us not forget also that the Japanese built up their stunningly successful industry behind a tariff wall of no less than 40 per cent.
The other aspect of the motion that we are debating is the problem of the multinationals. I would not wish to associate myself with the Secretary of State's view of multinationals. However, there is no way that we shall get rid of them. We must learn to live with them. It is worth recalling to the House precisely how important they are in our national economy. I take the top 100 companies, which will give an idea of the extent of industrial concentration in the United Kingdom, which is higher than in Germany, France and Italy—typical economies in Europe.
The top 100 companies in the United Kingdom make up 40 per cent. of our total output. That is an enormous amount of concentration, and of that top 100 per cent., 25 per cent. are now foreign-owned companies. The 25 per cent. in turn account for no less than 25 per cent. of our total national sales. That shows how important to us the multinationals are. Any Government will have to come to terms, by way of agreement, with the major multinational enterprises.
What have the Government done? They have reached a perfectly good planning agreement—in principle—with Datsun. Let us hope that they will be able to implement it. It is an agreement that Datsun should come here in exchange for certain things that we can offer them. I would define it as a perfectly good planning agreement, provided that Datsun will agree to invest in this country under certain conditions. [Interruption.] If the Minister of State is seriously suggesting that this investment by Datsun in


the United Kingdom did not eventuate from repeated and serious high-level official visits to Japan to solicit investment in this country, he is deluding himself.

Sir Keith Joseph: The hon. Gentleman should be speaking in the conditional tense. No decision has yet been made by Nissan to invest here.

Mr. Robinson: I am grateful to the Secretary of State for that intervention. If the Secretary of State will look at Hansard he will see that I expressed the hope that he would be successful. Having had the opportunity of negotiating with the Japanese and making three visits to Japan last year, I know how difficult it is. Provided the conditions attaching to the agreement are the correct ones, I shall be the first to congratulate the right hon. Gentleman unconditionally on it. But a series of conditions must be attached to the agreement. The most important of them is that the investment will lead to a real transfer of technology to this country.
We have fallen behind in technology. We have not produced the same number or quality of engineers as most of our competitors over a number of years. The Minister of State recently made a statement on the possibility of the Datsun agreement. I hope that I did not read too much into the conditionality of his remarks. In reply to my question whether the investment would lead to a real transfer of technology, he said:
On the transfer of technology, it can only benefit British technology to have an extremely advanced factory in Britain, with British workers and engineers"—
these are the key words—
operating, repairing and maintaining robotic systems."—[Official Report, 29 January 1981; Vol. 997, c. 1082.]
That is the Minister of State's view of the transfer of technology—that the cream of our engineers should be set to operating, repairing and maintaining highly advanced manufacturing systems that are researched, developed and produced elsewhere. That is the very opposite of the transfer of technology. The transfer of technology must involve access to the drawings and to the informed engineering intelligence that is inherent in those machines. The arrangement to which the Minister of State referred would do nothing more than turn us into an assembly factory for the Japanese. If that one point can be brought home to the Minister of State the debate will not be wasted.
I am aware that many other hon. Members wish to take part in the debate. I hope, therefore, that I have been appropriately brief. We are discussing the Government's economic policies and their effect on the motor industry—and in particular their effect on employment in that industry.
I should like, in conclusion, to quote from a speech made at lunchtime today by the right hon. Member for Sidcup (Mr. Heath). He was talking to business men, and what he said is very relevant to the Government's policies:
Whether you talk to business men or workers, they don't understand…what is going on. It is extremely dangerous in any democracy not to understand what policies are being pursued—even if they are monetarist. What they also lack is any indication whether there's any better sort of life for them at the end of these incomprehensible policies".
Those are the remarks of a former Prime Minister and a member of the Conservative Party. They are remarks with which I—and I am sure, all my colleagues on the Opposition Benches—would wish to be associated. It is entirely due to the Government's policies that we have the

enormous rise in unemployment and the enormous drop in production in the whole of the manufacturing sector—and in the motor car sector in particular.

Mr. Malcolm Thornton: In view of the large number of hon. Members waiting to speak I shall try to improve on the intended brevity of the hon. Member for Coventry, North-West (Mr. Robinson).
No one can doubt the importance of the debate or of the car industry to this country. No one can doubt, either, that the debate reflects our concern over the high level of unemployment and the effect that it may have if we lose any more jobs. Perhaps in this respect I am well qualified to talk about the loss of jobs and the effect on the car manufacturing industry, because in my constituency there is considerable interest in that industry.
In the industrial heartland of my constituency there is a monument to all that is bad in the British car industry. I refer to the empty Speke factory of British Leyland—a factory which closed three or four years ago, with the loss of 3,500 jobs. It is a factory which resulted from the regional policy to which my right hon. Friend the Secretary of State referred. It resulted from the tendency at that time to try to pick winners—to take highly labour intensive industries and drop them into areas of high unemployment. That was done with catstrophic effect in Speke.
Indeed, at the time that the policy was first initiated, when the factory was put into Speke, there were people who said that it had no chance of success. There were forces abroad in Merseyside—I shall not call them trade unionists, because I do not think that the trade unions would want to have anything to do with them—who said that they would close the factory in five years. They did rather better than that; they closed it in three and a half years. So picking winners does not work a policy in the car industry. It certainly did not work in Speke, and the high hopes that we had on Merseyside were cruelly dashed.
The policy does not work against market trends. What sense can there be in manufacturing one part of a car at one end of the country and then transporting it hundreds of miles to marry up with other parts of the same vehicle? That is marketing nonsense, and anyone who believes that that policy can succeed is deluding himself.
I should like briefly to consider the reasons why some of these things happened. I have already said that there were certain forces in Merseyside that were determined that the policy should fail. At the time of the general election, when I was talking to people who had lost their jobs, they told me that they had been led by the nose—that they had not seen what was happening around them.
Perhaps one of the greatest failures of the motor car industry—not just on the part of the work force, but on the part of management also—has been the failure of people to see what has been happening around them in other countries in the world. It is nonsense to suggest that the decline of the British motor car industry has occurred in the last two years and that it is all the fault of this Government. The attitudes that have led to the industry's decline have been prevalent for a long time.
Perhaps I may consider three factors with which I have become familiar in my relatively short time in the House as a Member representing a constituency with a car manufacturing industry. These are matters that have been


brought to my attention—and to the attention of other hon. Members on each side of the House—relating to the performance of the industry.
I refer, first, to what is called in the industry first-run capability—the number of cars that come off the line ready to go out to the public. The figures for the British industry make pretty horrific reading. That was certainly the case two years ago. The Government had been in office for only three or four months when I was shown the figures. The signs of a major decline were already evident. Toyota was quoting a first-run capability in excess of 95 per cent. At some car plants in this country the first-run capability was as low as 60 per cent. The best achievement of any car plant in the country was only 80 per cent. That is the sort of statistic that has caused us to lose our competitive edge.
The other question worth mentioning, and to which my right hon. Friend referred, is overmanning. I was shown comparative figures of manning levels in factories in this country and in factories of our European competitors, leaving aside the bogy men of Japan. Within the EEC there was a 3, 4 and 5 to 1 ratio of excess manpower in British manufacturing car plants. Is it any wonder that we cannot compete?
The most difficult issue with which to come to terms is the disruption of production. There has been massive disruption in our plants. If we are to retain our share of the market, it is essential that we produce cars regularly, to customers' specifications and when they want them. Most hon. Members will, I am sure, agree that, given a choice, in terms of price, quality and delivery the vast majority of people in this country would much prefer to buy British rather than foreign vehicles. If, however, we cannot match foreign competitors in any of those areas it is small wonder that we see greater penetration of the home market by our competitors. They provide the vehicles that people want, at the price they want, and when they want them.
The right hon. Member for Salford, West (Mr. Orme) tried to put the blame on the high level of the pound and the fall in investment. That is not true, particularly in regard to investment. In my constituency I have not only an empty factory but a very busy factory—Ford, at Halewood. It is one of the most modern car manufacturing plants in Europe. It has seen massive investment in the new Escort, which, by any definition, is a world-beating vehicle. It is a vehicle that people want and that, if it can be produced in sufficient quantities, can be sold. There have, however, been problems.
As this factory is located only just down the road from the large empty monument to failure that I have already described, it seems necessary that the attitudes that must be changed are changed quickly. Much of my time, together with that of Opposition Members who share a constituency interest in Halewood, is spent talking to both unions and management to try to see that problems are resolved.

Mr. Roy Hughes: I am following the hon. Gentleman's argument with interest, I cannot reconcile how one of the two factories in his constituency can be highly successful while the other, nearby, has been closed as a result of the disruptive tactics on the part of certain work people. How is that cordon sanitaire drawn between the two? I fail to understand.

Mr. Thornton: The hon. Gentleman obviously did not listen to my earlier remarks. There is an essential difference. In the Halewood plant a vehicle is produced from start to finish. In the British Leyland plant there was marketing nonsense. The plant was making bits of cars to go elsewhere. That was a major factor.
We are talking about a situation that started nearly a decade ago. I believe that there has been a significant improvement in attitudes at Halewood, which is causing things to turn upwards. I believe that this process will continue. It is certainly my hope that it does so.

Mr. David Alton: Does the hon. Gentleman agree that the principal reason for the closure of the British Leyland plant was bungling by the management? Does he agree also that there is a real danger that Halewood could go the same way unless people tackle the disease that can cripple Merseyside? That disease is the temptation to strike ourselves out of existence, through the mindless militancy of people who are unrepresentative of the greater part of the Merseyside work force.

Mr. Thornton: Much of what the hon. Gentleman says is true. I do not, however, agree that the major factor in the closure of the British Leyland factory was management failure. I believe that it was due to a combination of factors.
I agree that much of the image of Merseyside that is so prevalent in people's minds, that attracts so many headlines both in this country and abroad, and that does so much damage to the image of Merseyside, results from the mindless militancy of a few people who are so unrepresentative of the real people of Merseyside that it is not true.
I conclude on a slightly hopeful note—hopeful in one sense, but perhaps rather sad in another. The British Leyland component in Speke consisted of two parts. The future of the component that remains—the Pressed Steel Fisher factory—is currently in some doubt. I spoke in a debate on the Adjournment of the House of the potential unemployment problem that will be created in Speke. The factory has had a first-class industrial relations record for the last four years and has learnt considerable lessons from the closure of its sister plant. I believe that those within it could look forward to continuing employment under the policy of Michael Edwardes, which, in his own words, is one of throwing work at factories that have a good track record.
It is sad and perhaps salutary that the lesson has been learnt a little too late. However, in the case of Ford, the future is there for it to take. It has a world-beating car which, if it can be produced in sufficient volume, will bring an ever-increasing share of the market. I am encouraged by two remarks that emerged from a conversation in which I engaged last week with the Ford management. I was told that a shop steward came to the management and said "We have a problem". Previously, it had always been "You have a problem". I was also told by the management that the same number of cars had been made this month as in the previous month, and that although the target was perhaps not being achieved what was significant was "the way that we made them".
The signs indicate improvements. The signs indicate that attitudes are changing. If this change of attitude within the British car manufacturing industry continues it has a future. If these attitudes do not change, investment will not


be forthcoming, our competitiveness will continue to go down and we shall be able to look forward to nothing in the way of a British car manufacturing industry.

Mr. George Park: Hon. Members speak in the House as they find. I would, however, urge the hon. Member for Liverpool, Garston (Mr. Thornton) to contact the personnel manager at Talbot, who said recently that the notion of the car worker as a lazy layabout looking for the least excuse to stop work was completely outdated. That may be the situation within his experience. It contrasts with the experience related by the hon. Member for Garston.
The first fact that has to be faced when discussing the motor industry is that, world-wide there is over-capacity in car and commercial vehicle production. It follows that competition is fierce and will get fiercer. If we are to continue to have a motor industry it is essential that the terms of trade should be fair and equal. It is no good castigating our motor industry if at the same time we expect it to start 10 yards behind the scratch-mark.
The Government have signally failed to achieve fair trading terms. The Secretary of State for Trade is still talking about voluntary restraint on imports, and yet at the meeting with the CBI on 9 June he conceded that Japan's concentration on her export efforts in narrow sectors made it virtually impossible for industriea—not only the car industry—to compete effectively.
The Secretary of State is worried about the effect of protectionist measures on the general agreement on tariffs and trade. Our worry, as my right hon. Friend the Member for Salford, West (Mr. Orme) said, is that we seem to be the only country playing the game according to the rules. All the other countries adjust them according to the situation as they find it.
Our industry continues to be eroded while other countries reach agreement or tell Japan, for example, the percentage of vehicles that they will allow into their countries. But the threat is not confined to Japan. We allow imports of cars from Spain with a 4 per cent. import duty, while our manufacturers have to climb over a 36 per cent. barrier to get cars into that country. How can we compete on that basis?
Anomalies such as those have contributed to our share of world car production falling by two-thirds, and in the process we have lost a quarter of all the jobs. Only four of the major car manufacturers in this country made a profit this year. Vauxhall attributed its record loss of £83 million this year to three main factors, which my hon. Friend the Member for Coventry, North-West (Mr. Robinson) touched upon. It blamed the recession, which made for lower demand, but it also stressed that high interest rates and the strength of sterling were contributory factors. That was said by management, not by Labour Members.
However deeply held is the conviction that companies should fend for themselves we cannot ignore the fact that most Governments except the British Government intervene, by one means or another, to protect their industries. Countries such as Japan and Spain, which are most vociferous about free trade, have nurtured their car industries behind high tariff barriers.
A major difficulty is that the Government have no coherent industrial strategy and rely on constantly urging industry to become more competitive. They also have a

resolute belief in monetarism. I would interpret being more competitive as producing the same amount or a greater amount with the same amount of labour or less labour. Too often workers in industry find that not enough work has gone into the other side of the coin—determining whether there will be an outlet for the increased productivity. When that is not done they are in effect working themselves out of a job.
I come back to the Government's resolute belief in monetarism. Resolution is to be admired, until it degenerates into donkey stubbornness. We must face the fact that traditional Conservative notions on free and fair trade have to be modified in the light of changed conditions. The Government must accept—the Secretary of State has on occasion accepted it—that they must create an environment in which our industry can compete on equal terms. To that end there are various aspects on which they could take action, in addition to those mentioned by Vauxhall.
First, the Government could review the pricing of energy in the United Kingdom compared with energy prices available to our principal overseas competitors. Secondly, they could abolish the 10 per cent. car tax, which applies only to cars and motor cycles. Thirdly, they could relax the hire-purchase controls, which require 33⅞ per cent. minimum deposit and repayment of the balance within two years. No other goods face such stringent control. Fourthly, they could iron out the anomalies that I referred to earlier on import-export duties. Fifthly, they could move away from the voluntary understandings with Japan, which are not kept—in spite of what the Secretary of State said—and take the stand of countries such as France and Italy on imports, and impose limits. Sixthly, they could emulate the help given by West Germany to Volkswagen for research and development. Any or all of these steps would give a boost to a flagging industry.
Reference has been made to competition between different areas in Britain to attract the Nissan project. This is understandable in the light of the disastrous unemployment, but there would be little point in creating 5,000 Nissan jobs if in the process we lost 25,000 British jobs. To avoid that there would need to be prior agreement on the level of British components to be incorporated into the Nissan cars and their export, and the British-assembled Nissans should not be additional to those exported from Japan.

Mr. J. F. Pawsey: Does the hon. Gentleman agree that there is a risk that if we hedge Nissan around too much with restrictions it will move its proposed car plant to Belgium, Germany or elsewhere? It could then export its cars freely to the United Kingdom under the umbrella of the EEC, which would do even greater damage to the United Kingdom car market.

Mr. Park: That is a risk that we have to take. Whether one has a bad burn or is scalded, it is still very painful. We must have agreement from the word "Go", and if Nissan does not want to accept it, it will have to move elsewhere.
Directly or indirectly, the car industry accounts for about 11 per cent. of total manufacturing employment, and we should recognise, as other countries do, that if it is to remain an essential growth point in our economy it has to be nurtured and protected against unfair terms of trade. That should be the concern of Government. It is outside the scope of management.
Central to any discussion of the United Kingdom motor industry is, of course, British Leyland, if only because of our national stake in it in terms of money and jobs. The wish of some Conservative Members to sell it off without any real understanding of the consequences is still prevalent. The need for British Leyland to continue as a high-volume, full-range producer is part of the attempt to arrest the slide of the United Kingdom economy into an offshore processing and warehousing facility, swinging to the vagaries of multinational companies. If British Leyland goes we can be sure that Ford and Vauxhall will not be far behind in shifting their enterprises to the Continent and operating from there.
Under Sir Michael Edwardes a slimming down plan was accepted after a postal ballot in 1979. Even while the ballot was going on he was altering the situation, but that is by the way. The process of slimming down has continued up to the present time, to the point of anorexia, which is fatal, and there are suspicions that Sir Michael may be preparing the ground for decisions which the Government cannot face politically.
Quite apart from BL itself, it must be remembered that each 10 per cent. drop in BL orders to its 10 biggest components suppliers results in an additional loss of about 3,600 jobs in the components industry. A further 960 redundancies were announced today at Darlaston by a company supplying components to British Leyland.
A recent bombshell for the West Midlands, whose disastrous unemployment levels were referred to by my right hon. Friend the Member for Chesterfield (Mr. Varley) in the debate on 24 June, was the decision to close the purpose-built facility at Solihull, which I believe cost about £140 million. The production there is to be transferred to Cowley. Part of the reason given is that it would be more efficient if the assembly were alongside a body and paint shop. I should not have thought that it needed a managerial genius to see that before the millions were poured into Solihull, but now the production is going to Cowley, and more millions will be spent there.

Mr. Geoffrey Robinson: I think it is correct to say that there is a fully integrated body, paint and trim assembly plant at Solihull.

Mr. Park: No.

Mr. Robinson: I am sorry. My hon. Friend is right. The bodies come from Cowley.

Mr. Park: I had experience of this in Coventry on an earlier occasion. It happened to take place in the constituency of my hon. Friend the Member for Coventry, North-West. Jaguar came to the city council, of which I was then leader, and asked for planning permission to put a paint shop alongside the Jaguar assembly. We thought that that was a sensible idea. Despite great opposition from people in the area we bent over backwards to help and Jaguar was given the necessary planning permission. The steelwork arrived and was lying on the ground when the decision was taken to transfer the plant to Castle Bromwich.

Mr. J. W. Rooker: Who took that decision?

Mr. Park: I shall tell my hon. Friend that in a minute. We now understand that it is coming back to Coventry because the paint facility at Castle Vale may be closed down.
Situations of that kind constantly occur. The TR7, to which reference has been made, was transferred from Canley, in Coventry, up to Merseyside and then brought back again. It was then transferred temporarily to Cowley. Finally, it was killed off, along with the MG, so there are now no sports cars in the range.
An engine and foundry facility at Courthouse Green, in my constituency, has been steadily run down. We are supposed to have all the machinery for joint consultation, and so on, but the work force has no clear idea of its future. All we know is that each time there are redundancies active trade unionists are picked off, despite the fact that the plant has an excellent industrial relations record. Every time we make inquiries about these changes of thought and decision, the blame is placed on a previous management. It is always the fault of the management before Sir Michael. When is the second guessing going to stop? We must surely run out of previous management decisions before too long.
The only really bright spot seems to be the Metro, but Conservative Members should not expect the investment that launched the Metro to do much more than support its derivatives, and certainly not the continuing need for new models across the range, which cost between £300 million and £400 million for each model and need a gestation period of about five years. By supporting the new Jaguar the Government are beginning to appreciate those facts. The production of the LM/LC 10 models by 1983 is even more important to the future of BL than the Metro.
The need to go to Honda to fill a gap in the model range was due at least in part to the dispersal of design and engineering staff in earlier redundancies. Now there is doubt about the local content of components for the Acclaim, as it is called. Certainly all the high-value items come from Japan—the engine, gearbox, transmission and most of the electrical components—so the claim that it is 70 per cent. British made is misleading, to say the least.
The project is currently in phase 1. In the next phase of production, component manufacturers in this country, so far as I can see, will need to put in joint quotes, as they will be unable individually to tender for one of the kits into which the car is split up and which comprise about 20 components. Very often our manufacturers cannot quote for the whole range of 20. One must ask whether that will be allowed or whether it will turn out to be yet another demonstration of the methods used by Japan to protect its interests. We know all about that. We remember the engine stamping that was 1 millimetre out of place, so that a whole consignment had to be returned to this country. The Japanese are very good at that.
The basic idea of a partnership or an arrangement with another company recognises that the motor industry has become internationalised, and that concept should be pursued by BL. I believe that there were tentative moves with Volkswagen, beyond the purchase of gearboxes for the LM10, but I doubt whether the co-determination of policy by workers and management that applies at Volkswagen would be to the taste of BL or the Government.
To conclude on a brighter note, I welcome the decision of Peugeot to invest a further £10 million at its Ryton plant, near Coventry. I welcome also the grants that have


been made under section 8, which will benefit the Stoke factory. I believe that these have been achieved on merit, through the work of the people on the shop floor and the willingness of management to consult and inform regularly and to generate a climate of confidence, which is different from the constantly impending calamity that seems about to descend on BL.
The employees at Ryton will appreciate that the production from the new facilities still have to be sold. They may recall the exchange between Henry Ford and Walter Reuther, the American trade union leader. Henry was showing Walter the latest machines. When he asked Walter what he thought of them, the trade union leader asked "How many cars will they buy?"

Mr. Richard Shepherd: I wish to make one or two general rather than detailed remarks about the car industry. Like other hon. Members, I am grateful for the opportunity to discuss the car industry as it has an immediate and important effect, certainly on the economy of the West Midlands and on that of other regions. It exercises our concern greatly because of its effect on jobs.
Recently, in the county hall of the West Midlands a group of Members from both sides of the House, with other concerned in involved parties, gathered to consider the ways in which something could be done to assist the British car industry. As my right hon. Friend the Secretary of State said, the central and crucial issue facing us is competitiveness. I do not wish to allocate blame or to identify the reasons why we came to be uncompetitive. The truth—and the statistics provided by the county council bear it out—is that our uncompetitiveness is so great that it poses grave questions about whether our industry can survive for many more years.
In the brief supplied by the West Midlands county council, the section on productivity states:
The final factor in shaping the development of the industry, the search for increased productivity, also stems from the need to reduce cost and improve competitiveness. In some cases the greatest problems arise from operating below capacity production levels (Austin-Morris, Cowley, about 30 per cent., Rover Cars, Solihull, about 27 per cent.). However, even Britain's latest and best, the Metro production line, has a target of 32 cars per man/year (which is very high by European standards) when the Japanese industry average is 45 cars per man/year, with 'best practice' plants giving 67 cars per man/ year".
The order of the differential in competitiveness is massive, and those figures toll anxiety not just for us but for Europe.
On reflection, rather than experiencing a world recession I believe that we are witnessing a recession in European competitiveness. Its competitiveness has declined vis-a-vis the new companies of the Far East and the old responsive industries of North America. Even allowing for that, last year, for the first time, the Japanese car industry overtook the American car industry.
Where is the responsiveness in all this? We have talked about lack of investment in the British car industry, but the Metro plant is the most modern plant, enjoying the greatest cpaital investment that we have been able to provide in recent years. Yet according to the figures provided by the West Midlands county council, its target—not yet its achievement—is 32 cars per man/year. We should

consider how that compares with the best practice plants in Japan. We are talking about something that underlies our ability to respond to challenges elsewhere.
When confronted with the same problem of cars coming into its economy the United States car industry responded on two levels. First, there was an endeavour to restrict industrial imports that are basically more competitive—which is the natural response of us all. Secondly, the American industry decided to reinvest so that it could respond to the challenge and beat the competition on its own terms. I understand that the reinvestment programme of the United States car manufacturing industry will be about $80 billion over the next five years.
Like many hon. Members, the Americans realise that without a major car industry, or at least new major industries replacing it over the coming years, we shall see long-term high structural unemployment in areas that have contributed not only traditional skills but significant wealth to our economy.
I am personally deeply pessimistic about our car industry, because, unfortunately, I feel that Europe is not showing the responsiveness that characterises the industry in America. According to the European Commission, over the next five years Europe will invest about $20 billion in the European car industry. I am not sure that that gives us the basis on which to respond to the challenges of Japan.
I am also concerned because it now seems that the British market is viewed as a soft one. Our foreign, Continental and Japanese competitors are pricing up to meet our cost-related prices. A Sunday newspaper recently undertook an exercise that showed that it is now cheaper to buy British model ranges practically anywhere in Europe other than in the home market, and that even allowing for duty—

Mr. Les Huckfield: That is because of the exchange rate.

Mr. Shepherd: I shall refer to that in a moment. Even allowing for the duty and VAT contribution, we are talking about £1,000 on the Metro and, I understand, about £1,500 on a Volkswagen Golf automatic.
Much is said about the exchange rate, and in part that has been a factor. However, the exchange rate average for last year was $2·30. So far this year, it is about $2·08. Therefore, the exchange rate has not been the only factor. British Leyland has priced down for Europe to maintain its market share and distribution, but basically we are still acknowledging the fact that costs of production in the United Kingdom are much greater than those of our Continental competitors. That makes us a soft market.
Perhaps there is nothing that we can do to redress the balance, short of some form of import control. That has been suggested as part of the Opposition's industrial strategy. I would not necessarily be against import control, if it were argued that it was to protect infant industry, that we were looking at our own car industry as if it were starting up from nothing, and that we were trying to build a strong home market that enabled it to be competitive in production.
My gloom about that possibility is reflected in the figures published for the Metro itself. Even on the latest production runs, we are talking about only 32 cars per man, year. How do we propose to produce cars in


competition with Japan? At the end of the day, import controls mean that the British public must pay more for a product than they need otherwise do.
By virtue of its external tariff the European Community asks us to do just that. My constituents—I am sure that this is true of others—when making their choice in a free market as free individuals, are choosing to buy foreign models. Therefore, I am not sure whether the answer is import control. I fear that that would direct our scarce home resources into uncompetitive industries that provide perhaps only temporarily major employment, as a consequence. That is the dilemma that we all face.

Mr. Huckfield: From the investment comparisons that the hon. Gentleman has just made between Europe and Japan, and from his cost comparisons between the United Kingdom and the rest of the EEC—which I do not accept—the logic of what he is saying is that we should not have a car industry. Is that the hon. Gentleman's conclusion?

Mr. Shepherd: I was trying to rehearse the arguments as I see them and to highlight the dilemma that confronts everyone who has to make a judgment on the future of the British car industry. There is no easy answer, nor is the problem explained away by the exchange rate, productivity, manning levels and the relationship between management and unions. On the basis of the allocation of resources there may well be a case for saying that there will not be a British car manufacturing industry in the medium-term future. I do not know.
In May, an analysis by Economic Trends suggested that there may not be major manufacturing car industries in the United States and Europe, and that Japan may become the central car producer of the 1990s. That is a real worry that we must consider.
I have heard no argument from the Opposition to suggest that we can regenerate our car industry so that it can stand on its own in competition with Japan. If such an answer were forthcoming there would be much greater confidence by myself and many of my right hon. and hon. Friends in our response towards the British car industry.
We are talking about an activity that consumes great resources. The Government, perhaps agonisingly, are investing a great deal of money in it. But even in our best production plants, such as the Metro, there is still a great shortfall in output per man/year. I am not sure how we can bridge that gap so that we do not distort the British economy by pushing resources into car production at the expense of something that is more viable and lively. That is the issue to which we must address ourselves. That is why I believe that the Opposition's motion is misjudged and too simplistic by far. That is why I confidently support the Government's amendment.

Mr. David Alton: In a perceptive and realistic speech the hon. Member for Aldridge-Brownhills (Mr. Shepherd) summed up the dilemma facing hon. Members when they consider the car industry. It was with some sadness that I looked at the Opposition motion. I came to the conclusion that it did not say sufficient about the problems of the car industry, and left us with the same old disputes about whether we should have import controls. It did not look at the fundamental

causes of what has plagued the car industry for so long. For that reason I decided that I could not support the motion.
I looked at the amendment and I listened carefully to the Secretary of State. With the reservation that I should like to hear the Minister's answer to my points, I am in broad sympathy with much of what the Government say. Broadly, they are getting things right for the British car industry.
This morning's newspapers mentioned two events that illustrate the dilemma to which the hon. Member for Aldridge-Brownhills referred. The first event was that yesterday Vauxhall recorded a loss of £83 million in the last financial year. It was interesting to note that the chairman and managing director put the loss down to the world recession—from which we cannot escape—and to under-utilisation of facilities.
The motion avoids that problem. Perhaps the Opposition have fallen into the trap which, for once, the Secretary of State appears to have avoided. Often the right hon. Gentleman has laid the blame at the feet of the trade union movement. That is not necessarily where the blame lies. Perhaps the Opposition have fallen into the same trap by laying the blame at the feet of management and by saying, in simplistic terms, that the answer lies in sheer crude import controls.
The hon. Member for Liverpool, Garston (Mr. Thornton) spoke about British Leyland's decision to put part of its TR7 manufacturing plant on Merseyside. That illustrates the type of bad management decision that has led to the closure of similar firms on Merseyside. The decision was mistaken. Nevertheless, as the hon. Gentleman pointed out, in parts of Merseyside there is still such mindless militancy that one wonders whether some people wish to strike themselves out of existence. I cannot understand why they do that when unemployment in parts of my constituency is as high as 40 per cent. In Liverpool, unemployment stands at 16 per cent. I do not understand why people do not adopt a more enlightened view when considering management and trade union relations.
I deal next with profits and the Opposition's usual attack on multinationals. That is not the answer. Profit is not a dirty word. What is important is how that profit is used and shared, and what incentive is given to people to feel that they share in the rewards of their labours and efforts.
I hope that the Minister will deal with an important question that has been raised. In the quarterly journal of the Finance Houses Association, Credit, it was stated that if terms controls were eased an additional 22,500 cars—about 4 per cent. of the British market—could be produced each year. It suggested that that could be done by extending the period of repayment from 24 to 36 months and by cutting the down payment in an instalment credit from 33⅓ to 25 per cent. Perhaps the Minister will let us know the Government's attitude to that suggestion.
In general, I am in favour of continuing substantial public investment in the British car industry. We must continue to do that over the next five years in order to safeguard the industry and to ensure the direct and indirect employment of hundreds of thousands of British people. A prosperous car industry is vital to the economy of the United Kingdom in several respects.
Let us consider the unemployment situation in Britain. The effect of a sudden closure of British Leyland, for example, could result in about 700,000 people becoming


unemployed. At present, 130,000 people are directly employed by British Leyland, and for each of those workers there are at least three or four workers in component manufacturers and other services who are dependent upon British Leyland. When that is taken into account it is reasonable to say that the closure of BL could push unemployment in areas such as Birmingham or Coventry—hon. Members who are more qualified to speak about those areas have already made this point—up to about 30 per cent.
Coupled with the problem of the unemployment that would be created by a diminishing interest and investment in the car industry is the serious effect that that would have on Government revenues. For instance, we would begin to see increasing revenue losses from rates and taxes, and at the same time a necessary and major outlay of public funds to pay for the usual round of social security benefits and redundancy entitlements and to set up jobs creation programmes for those adversely affected. In addition, the hidden social costs would have to be paid for. I refer not least to the additional health and local authority service costs, to the cost of extra staff to cope with increased unemployment benefits and to the loss in morale among the unemployed.
From those consequences alone, it is obvious that continued public investment in the car industry would be very cheap indeed compared with the dastardly effects that a lapse in the investment of public funds would create. It would be an injustice, as well as an insult to the people of the United Kingdom, to force the country into a situation where an industry's and a people's productivity level could be measured only by that industry's profit margin. Unfortunately, that sometimes appears to the public to be the criteria that governs the Government's attitude.
The effect on Britain's balance of payments is another significant factor that will have to be borne if the car industry is not given adequate financial support by the Government. Any decrease in public investment could kill off the last vestiges of the British car industry, making it necessary for Britain to import hundreds of thousands of additional vehicles every year, without seeing a corresponding number of exports. All right hon. and hon. Members will understand the serious nature of such a gross imbalance.
The answer to the car industry's problems does not lie in import restrictions or in governmental intervention to regulate multinational companies involved in the car industry. Last year, along with other Merseyside Members, I met Sir Terence Beckett, secretary-general of the CBI and former chairman of Ford. He said:
Import controls are Stone Age stuff".
Import controls are also part and parcel of a tremendously insular society which refuses to recognise the positive contributions to technology that other countries can make.
In that respect, I refer to the other piece of news in this morning's newspapers. I refer to British Leyland's decision to launch its new car, the Acclaim, in October. That is an indication of how the technology of our trading partners can be used to benefit our car industry and to ensure that jobs remain here.
After all, we in Britain must have, as our first concern, the production of the best possible commodity for our consumers. Consequently, we must realise that that often means a willingness to benefit from improved technology, which we can use to improve the quality of jobs in the car industry. It is for that reason that I applaud the Japanese

Government's good will in agreeing to voluntary restraint agreements with Britain. I hope that they will continue, because those agreements, rather than rigid import restrictions, are the way to rectify and bolster the British car industry. In its turn, the Department of Trade must conduct a more vigorous campaign to persuade the Japanese Government to remove their restrictions against British exports.

Mr. Les Huckfield: The hon. Gentleman seems to be saying that the Liberal Party does not need to have a policy for the car industry. In the first part of his speech he said that he basically agreed with the Government's strategy. The Secretary of State told us that the Government's strategy was to reduce public investment in the car industry. With the exception of the last part of his speech, the hon. Gentleman spent his time saying that he wished to increase public investment in the car industry. Where does he stand?

Mr. Alton: In my opening remarks I made it clear that the six lines of the motion could not prove to me, or to any other thinking Opposition Member, that we should give our blind support to a policy that seemed to rely on knocking multinational industries and on the rigid imposition of import controls. I also said that I had several reservations about what the Secretary of State said. I have tried to deal with them in my remarks, and I hope that the Minister will reply to my points.
The amendment notes that the Government have provided substantial funds to the industry at the expense of taxpayers and other sectors of industry and commerce. I do not believe that throwing money at problems will make them go away. We must consider using more sophisticated methods. In the past, we have fallen into the trap of throwing money at problems and of putting poultices on them. We have not cured them.

Mr. Tristan Garel-Jones: Does the hon. Gentleman agree that in the short time that I have attended this debate——

Mr. Huckfield: Very short indeed.

Mr. Garel-Jones: —the hon. Member for Nuneaton (Mr. Huckfield) has sought only to make party political points in an otherwise serious debate. When my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) made his serious and thoughtful contribution, the hon. Member for Nuneaton turned to his right hon. Friend the Member for Deptford (Mr. Silkin) and said that my hon. Friend had a marginal seat. Now, the hon. Member for Nuneaton is trying to make further party political points against another serious and thoughtful contribution, this time from the Liberal Party. Does that not underline, as Disraeli said, that import controls are not a policy but an expedient? Does it not underline also the expediency behind the motion and the hon. Member's interventions?

Mr. Alton: I agree. The rigid imposition of import controls will never be a cure for our economic problems. We have to trade with the rest of the world. If we want to become a country that floats out into the Atlantic and drifts endlessly into oblivion, nothing will achieve that more successfully than the Opposition's proposals.
That policy would also lead to a weakening of the Western Alliance and a breakdown of our trade relations, not only with Japan, but with other countries. Import


controls are no way to revitalise our industry or further trade relations. Voluntary restraint agreements are far more appropriate at this time. They will ensure the best consequences for all.
We in the Liberal Party acknowledge the Government's attempt to honour their commitment to invest in British Leyland, and the efforts of Sir Michael Edwardes to rejuvenate BL. However, we call for a continued commitment of funds to the British car industry, because its decrepit plant and machinery must be modernised if it is to compete against the countries about which the hon. Member for Nuneaton (Mr. Huckfield) complained.
Furthermore, we believe that the further outlay of funds through social security and unemployment benefits is no way to use taxpayers' money. It would be better to invest in the car industry, so that it can provide jobs and prosperity. We believe in voluntary restraints on imports rather than on protection, so that we can democratically come to an understanding with our trading partners. That will enable us to have the benefit of improved and new technology, while ensuring the integrity and continuation of our motor vehicle industry.
We cannot, therefore, vote for the motion. What the Opposition propose will cost consumers more and deny freedom of choice. On the other hand, the Government seem to be asking us to give them a certain amount of carte blanche to go on throwing money at problems without ensuring value for taxpayers' money and without a long-term strategy for facing the need for further automation, the need to tackle the consequent unemployment, the need to create a modern industry that can compete in a free market with our international competitors, the need for profit-sharing and worker involvement and the need to create an ordered system of wage settlements that will remove confrontation and chaos from the British workplace.

Mr. J. F. Pawsey: I was impressed with what the hon. Member for Liverpool, Edge Hill (Mr. Alton) said about the need for profits. He said that "profit" was not a dirty word. At least he has grasped that it is from today's profits that tomorrow's jobs come.
In any debate on a major industry it is difficult to avoid the thought
how are the mighty fallen.
About 15 or 20 years ago the motor industry was paramount among manufacturing industry in the United Kingdom. It was, as Aneurin Bevan said, one of the commanding heights of the British economy.
There are four basic reasons for the motor industry's decline. The first is the record of strikes, lost man/hours and low productivity. The second is poor management decisions, the third Government interference, and the fourth the impact of imports, particularly from Japan.
Let us consider industrial disputes. In 1973, for example, there were 297 separate stoppages involving 441,000 employees. In that year, 2,082,000 days were lost. How any industry can maintain a competitive edge when faced with such an appalling record is beyond imagination. Even as late as 1979 there were 165 separate stoppages, involving 367,000 workers, with 3,710,000 days lost. That is the size of the self-inflicted wound.
Throughout the 1960s and 1970s the British motor industry increasingly lost its reputation for both quality and quantity. Its work force achieved the unenviable reputation of being prepared to strike for the most trivial reasons. Industrial relations were maintained on the basis of two opposing sides. Misunderstanding and suspicion became the order of the day.
That, indeed, is reflected in the nicknames of some of the central figures of that time—the "Mole" at Cowley and "Red Robbo" at Longbridge. There was the remarkable case at Linwood when the entire work force went on strike because a single worker was suspended for urinating against a wall. The motor industry became a byword for unreliability and the tea-break car became a fact. I accept that all that was in the past and that a new sense of realism is, at long last, coming into the motor industry. That sense of realism is illustrated in my constituency of Rugby.
Rugby contains the Talbot plant at Ryton. Only this week a £10 million investment programme was announced by George Turnbull, its managing director. That is an investment in the future, in the product, and in the work force and management at Ryton. That investment follows in the wake of a 25 to 30 per cent. improvement in productivity in the last 18 months. It shows what can be achieved in the British motor industry when management and work force sink their differences and decide to work together.
I do not say that management is always right and unions are always wrong. However, the trade union movement must accept a considerable responsibility for the state of the British motor industry. Senior management has also made far too many mistakes. It is extremely difficult, for example, to justify the original decision that led to the formation of British Leyland, even when one recalls that it was formed during the era of biggest being best. The way in which British management has too often decided to abdicate control of its factories and plants to purchase peace at any price is an indictment of British management techniques.
The decisions to build car factories far from the centres of component production defy the basic laws of geography. The original Linwood decision, which was questioned by so many in the Midlands motor industry, is but one case. We must now hope that British managers have the confidence and drive to take and implement the difficult decisions necessary once more to introduce volume and quality car production into the British motor industry.
Management must understand that it, and not the unions, must take the basic decisions. Of course, there must be consultation, but the operative word is "consultation" not "abdication."
Successive Governments have grossly interfered. That is best illustrated by the way in which hire purchase has been used as a regulator. Governments have moved hire purchase deposits up and down and shown a complete lack of understanding of the realities of mass production. Successive Governments have appeared to think that production can be turned on and off like a tap. I have had seven years' experience in the British motor industry. People who have worked in the industry know that a considerable lead time is necessary to ensure that components arrive at the right time in the right quantity and at the right price.
Adjustments to purchase tax, with their consequent effects on sales and production, disrupted this finely-tuned


mechanism and were responsible not only for lost production but for much of the frustration felt by workers in car plants. Workers, through no fault of their own, saw the demand for their products falling and, through that fall in production, saw the money in their wage packets falling too. That frustration was reflected in some of the stoppages that occurred. The regulator that I have described was but one of the many sticks that the Government have constantly used to beat the British motor industry. For example, the tide of legislation that has poured from this House, albeit with the best of intentions, all made it more difficult for British motor companies to operate at a profit. Employment protection and health and safety at work legislation all helped to reduce the competitive edge of British industry. Whether or not the Opposition choose to hear it, investment will come only from profit.
I accept that throughout the 1960s and 1970s investment was low because profitability was low. The current massive investment in the British motor industry, specifically in British Leyland, comes not from profit but from a direct investment by the State—an investment which is being paid for by the profitable private taxpaying sectors of the economy. It is worth repeating that Leyland's price is being paid by the increasing liquidations and redundancies of the private sector.
Then there is the impact of imports, especially from Japan. It is extraodinary how the Japanese share of the vehicle market in Western Europe has grown since 1970. It has risen from just over 100,000 in 1970 to 808,000 in 1979. What is worse, Japan is deliberately gearing itself for a major assault on the markets of the rest of the world. The Japanese motor industry is now, without doubt, the largest and the most efficient in the world. Last year it became the largest volume producer of passenger cars. Output totalled over 7 million units. That staggering achievement came at a time when the majority of the other car producers in North America and Europe began to move into recession. The drive by Japan has penetrated all the markets where it has not been deliberately restricted.
The hon. Member for Coventry, North-East (Mr. Park) made a good point. He said that France had been particularly successful in restricting Japanese imports to about 3 per cent. of registrations. In Britain the equivalent figure is about 11 or 12 per cent.—four times greater than France, our partner in the EEC. It is expected that by 1985 Japanese production capacity will increase to about 14½ million vehicles, with the overwhelming number of those vehicles being produced for export.
Japanese effectiveness will be measured in job losses. The British motor industry expects that the total number of jobs lost in Western Europe as a direct result of Japanese penetration will be about 500,000. That is the reality of the Japanese challenge and the problem that faces us.
It is also noteworthy that the CBI, which has long held a free trade stance, is now calling for a limit to be imposed on Japanese imports. Currently the United Kingdom's deficit of trade with Japan is in excess of £1 billion. Britain's total visible trade deficit with Japan has increased from £278 million in 1975 to £1,100 million in 1980. It could reach £1,400 million this year. I am aware that it is argued that should we impose import restrictions on Japanese goods there would be retaliation, but what form of retaliation can equal the disastrous problem currently facing this country and Western Europe? I am firmly convinced that we would not have a great deal to lose if we were to impose a strict quota on Japanese goods.
That, then, is the problem, but there is a solution. We should impose a five-year moratorium on Japanese imports, which would protect the British motor industry. Without a moratorium our motor industry will go the same way as the motor cycle industry, the radio and television tube industries and others. It is worth remembering that the Japanese motor industry developed behind technical and tariff barriers, which still exist. As an earlier speaker said, fewer than 3,000 British vehicles are being exported to Japan. If we could achieve a five-year breathing space, that could be used to increase productivity, to step up production to reduce unit costs and, above all, to improve the quality of the products of our motor plants.
I make three constructive suggestions. First, we should increase the rate of capital allowances to companies purchasing motor cars from the present 25 per cent. to 40 per cent. I suggest that because the majority of fleet purchases are British motor cars. That would specifically help the British motor industry.
Secondly, we must hope that the Government's Green Paper on industrial relations will pave the way for more constructive legislation this winter. I hope that that will deal with the closed shop, secondary blacking and the need for secret ballots before industrial action is taken. I appreciate that there is a new sense of realism on the shop floor, mainly engendered by the present rate of unemployment, but whatever the reason, this could be our last chance to strike a balance between the power and responsibility of trade unions.
Thirdly, we should be commencing a major "Buy British" campaign, funded by the Government—specifically by the Department of Industry. An analogy can be drawn with the road safety campaign mounted by the Department of Transport. That campaign has saved lives. A campaign designed to buy British goods would save jobs. Current high imports can be likened to a latter-day Trojan horse, for as imports increase so the number of jobs fall. Increasingly, more and more people are becoming concerned about imports and about the belief that something must be foreign before it is good.
We need a major "Buy British" campaign. It is a case of "Let us buy British and make work for ourselves". The campaign should be seen throughout all walks of life. It should be seen in industry—both in the board room and on the shop floor—in the home, in schools and in public life. The British trumpet needs a good, long solid blast, because for too long we have been silent and have allowed the knockers and the whiners to undermine our belief in ourselves. It is time that we put the record straight.
I conclude by putting a thought to my hon. Friend the Minister of State, that if he needs a slogan for such a campaign I will give him one free, gratis and for nothing—"Buy British and save a job."

Several Hon. Members: rose——

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. More than 15 hon. Members have intimated to me that they would like to take part in the debate and there is less than two hours left.

Mr. Roy Hughes: In the 15 years that I have spent in the House this is the first car industry debate in which I have participated. Perhaps I should qualify that by saying that I am chairman of the parliamentary group of


the Transport and General Workers Union, which organises more than two-thirds of the workers in the industry. What is more, I spent the 10 years before coming to the House in the car industry in Coventry, as an officer of that union.
In those days Coventry was a thriving, thrusting engineering city and one of the centres of our car industry. Today, the industry is relatively in tatters. I say "relatively", but, of course, I wish all good fortune to the Metro and the other new projects which British Leyland has under way.
What has happened to the car industry is a tragedy for the whole country. I know that industrial relations have not been all that we might have hoped. The blame lies on both sides. However, successive Governments have never really appreciated what an important sector of the economy the motor industry is. From time to time they have manipulated the industry in a cynical manner to regulate the economy and to create a boom or a slump—whichever suited their short-term needs. At one stage, the industry was starved of investment. The seed corn was squandered. The road building programme was also a factor in the industry's decline, because it was not pursued with sufficient vigour and tended to hold back the introduction by our manufacturers of new models.
The deterioration of our car industry in the last decade is measured easily by citing one or two statistics. In 1970, 12 per cent. of the cars coming on to British roads were foreign-made. Today, the total is more than half. A further indication of what is happening is that the new medium-range model to be introduced by BL at Cowley is essentially a Japanese model. We are now hoping that Datsum will be building a major manufacturing plant here.
My own constituency is in the running for the project. The Japanese have been to Newport to examine the site. It is next to the Llanwern steelworks, and someone has remarked that the necessary steel could almost literally be thrown over the wall. So we must not be too pessimistic about the future. The House will recall what was said about Llanwern steelworks not so long ago. I am glad to say that the works is now producing steel to Japanese standards.
Some people have tended to put the blame for the troubles of the British car industry on the Japanese. However, that is not true. The vast bulk of the new cars coming on to our roads from abroad come from our so-called Common Market partners. With the all-party motors group of the House, not long ago I visited two of the Renault plants in Normandy. A fortnight ago I had the privilege to visit the major Volkswagen plant at Wolfsberg. In that huge complex, employing no fewer than 58,000 people producing only cars, we gathered from conversations with German executives that the company was terrified of Japanese competition. Formerly, German manufacturers had believed fully in free trade. Today the ball game has changed slightly.
The fact remains that Renault and Volkswagen alone export to Great Britain more than Japan's total exports. I make no mention of Fiats, Citroens, Audis, Mercedes and BMWs.
I also notice that the new Rover plant at Solihull is to be closed. It is alleged to be one of the most modern car plants in Europe. Only a few years ago it produced the new Rover, which was described as the car of the year. From

personal experience, I can say that it is an excellent car.
Every Sunday in the colour magazines we see major advertisements for the Audi, the BMW and the Mercedes. I do not blame those companies. They have their teeth into the British market and they do not intend to let go. I blame successive British Governments for allowing this key industry to be eroded almost to the point of no return.
I grant that much public money has gone into British Leyland in recent years. But much of it has been like pouring money down the drain. Alongside this new investment, import controls were needed. This is essentially the policy of the Transport and General Workers Union, which is by far the biggest trade union in the motor industry.
Our car industry needs time to modernise and to become competitive once again. Our Bourbon leaders have been wedded to the dogma of free trade. There is nothing wrong with the concept of free trade but if it does not suit our national interest at any time we should reject it. If we go back to Sir Robert Peel and the Corn Laws, to Austen Chamberlain or to the build-up of the German economy—the Zollverein—under Bismarck, we see that that has happened in the past. More recently, Japan has built up its own industries behind tariff barriers. If free trade does not suit Britain at any time there is nothing wrong in rejecting it.
Unfortunately, however, as a result of the free trade dogma which has been pursued with such vigour for such a long time, ordinary people have had to pay the price, because so many of them today are in the dole queues. This mass unemployment brings on all the stress and social tension which we now experience. My hon. Friend the Member for Coventry, North-West (Mr. Robinson) spoke about the speech in the last 24 hours by the right hon. Member for Sidcup (Mr. Heath), who pointed out that much of today's juvenile delinquency and crime could be attributed to present Government policies. That, too, is a relevant factor, and I am grateful to the right hon.
The ripples of the decline of the car industry as a whole have extended to many other industries. I represent Newport, which could be described as a steel constituency. When those Renaults and Volkswagons began to dominate our roads there was a reduced demand in this country for steel. The British Steel Corporation came under pressure. Its competitive position was undermined. Its unit costs rose. In turn, our manufacturers imported so-called cheap foreign steel. The British Steel Corporation had to be bailed out by the Government. Thousands of steel workers were put on the dole. The same applies to many of the component industries. The record in tyres is catastrophic. In Caernarvon, a major factory, Bernard Wardle, which produced leathercloth, was closed. Glass and paint have been similarly affected.
Then, more basically, there is coal. The British Steel Corporation, finding itself in the predicament that it did, said that it wanted to import cheap foreign coal. That resulted in a major argument about possible pit closures. Transport was similarly affected, particularly the railways, being a major bulk carrier. The whole picture is a sad one.
A statement was made the other day by the Automobile Association, which said that 47 out of every 100 people in this country drive to work. On that basis, 29 out of every 100 people use a foreign car. I remind those people that they are driving themselves and their mates to the oblivion of the dole queue.
Ten years ago, Lord Stokes, the then chairman of British Leyland, told us that a marvellous future lay ahead of the British car industry when we joined the Common Market. A year or two later British Leyland was just about bankrupt and had to be bailed out by the Labour Government. It appears to me that many of the difficulties, not only of the car industry but of other manufacturing industries, are the direct result of British membership of the Common Market. It has given the multinational companies the opportunity to rape the British economy.
We all know that the Labour Party conference called for Britain to come out of the Common Market. I sincerely hope and trust that the next Labour Government will honour that commitment. In our recovery, which I hope will not be too long delayed after that new Govenment are elected, I hope that we shall use the public sector to lead in engineering our economic revival and to boost demand in the classical Keynesian way. Instead of allowing that stimulation of the economy to generate a new flood of imports we need import controls, as the famous group of economists at Cambridge have advocated for so long. Thus we can ensure that our recovery is not abortive or short-lived.
That, then, would be a part of our strategy to get Britain moving again and to make our economy competitive. Nevertheless, such measures are not intended to restrict our engaging in international trade. Rather, they are to expand our overall trade. When the 3 million people are brought out of the dole queue we shall produce more and the demand will be greater.
I know that the car industry has been dealt some severe blows in recent years. However, it now needs every encouragement. It can play a major part in Britain's economic recovery, which I hope will not be too long delayed.

Mr. Graham Bright: In the short period that I have at my disposal I hope to deal with some of the problems that concern my constituency, which houses the major Vauxhall plant in this country.
Vauxhall is now very much part of General Motors, which is one of the multinational companies that we talk so much about. Many people are only too ready and willing to knock the multinationals, particularly General Motors. However, it is fair to say that that if General Motors did not have the controlling interest in Vauxhall, Vauxhall would not exist. Vauxhall has had a bad time. In the last seven years it had losses of £82 million. Yesterday, sadly, we heard that in the past year that figure has been overtaken by a massive loss of £83 million. I underline the fact that Vauxhall would not be where it is now without General Motors. Indeed, General Motors has given a firm commitment that it wants Vauxhall to stay as a viable operation, and has said that it has no intention of backing out of the United Kingdom.
The president of General Motors, who visited this country a few months ago, said that his company was very concerned that the return and productivity at Vauxhall were so disappointing. That was highlighted by the fact that General Motors made its first loss since 1921 last year.
General Motors has put £105 million into Vauxhall to cover losses, as well as a further £75 million worth of investment. That investment will be spread over a fairly wide area, to cover the introduction of the J car, which is to be built at Luton, the T car, which is known as the Astra

and which is to be assembled at Ellesmere Port, and to put further investment into A.C. Delco, which is the components end of General Motors in this country.
The General Motors strategy is to bring three world cars on to the market—the T car, which is the Astra, which at present is built in Germany and which is to be assembled in the United Kingdom; the J car, which replaces the Cavalier; and the C car, which is the new General Motors mini car, which clearly will be in direct competition with the Metro. All those cars will have interchangeable parts—engines, gearboxes and, in some cases, body panels—and will be built on a world-wide basis.
The sad thing is that the J car, which is now being prepared at Luton, will be built with component parts that come from all over the world, but not, from what I have been able to find out, unfortunately, from the United Kingdom. That is sad. Vauxhall said that if British suppliers can compete on price and produce goods on time, there is no reason why this should not eventually become more of a home-produced car.
Look at what has happened with the Cavalier. When it first came to Britain it was 100 per cent. German. It was already assembled. When it was eventually assembled at Luton most of the parts came from abroad. Currently, the car is 60 per cent. assembled from British labour and components. Although we can criticise the fact that Britain is assembling motor cars that are ostensibly prepared and built abroad, at least we are employing a labour force of several thousand. By improving productivity and showing that we can deliver the goods we have the option and the opportunity to build cars with British components.
General Motors is the largest motor car manufacturer in the United States. However, it is very much behind Ford in both volume and profitability in its operations outside the United States. In 1978 it embarked on a massive world-wide investment plan of $38 billion to bring it in line with Ford. It wanted to compete and become the No. 1 manufacturer world-wide. The way in which it did that was a little unfair to Britain. The number of cars built by Vauxhall in 1974 was 249,000. The figure for 1980 was down to 150,000. It is not the same story in Europe. Opel output has risen by 50 per cent. There is no way in which the recession can be blamed for that contrast in fortunes. It is purely the result of decisions by a multinational in America.
Reality has at last broken through. The change of attitude within management and unions at Vauxhall must be seen to be believed. Unfortunately, the decisions were made by General Motors four or five years ago, when productivity and labour relations in Britain were nothing like as good as they are today. We are paying the price for the difficulties that we experienced a few years ago. We must be constructive. We must work hard and prove that we can build cars in Britain—and that we can build them to quality, on time, and without the destructive forces that we have seen in the past.
Let us consider the way in which the reshaping has affected Vauxhall. It is the same story that we hear from a number of areas. The design and engineering of new cars has gone to Opel in Germany. We have lost a tremendous number of skills. Unless there is the possibility of the design and engineering returning to Britain, those skills will disappear for ever. We have also surrendered the European dealerships. Vauxhall cars are no longer permitted to be sold in Europe, which means that we have


lost export potential. The assembling, rather than the manufacture, of German and Belgian cars is the order of the day.
There has been an integration of Vauxhall and Opel dealership in Britain. That has downgraded Vauxhall by bringing it into line with Opel. The work force has been reduced from 33,000 to 23,000 during the past two years. Within General Motors, in real terms, Vauxhall has been downgraded. It has lost skills. Britain has lost the design capability and the manufacturing experience that it needs. To bring back those skills we need a share of car manufacture. We accept the world-wide concept of car building. There is a great deal in that argument if we are to beat the Japanese. However, it is essential that Britain keeps part of the manufacturing ability. We must have a share in manufacturing parts for the cars. I would be happier if Luton were building the engine, the gearbox or the transmission for the new J car.
We have been told that an engine plant at Luton would mean a £125 million investment. With Vauxhall's record of profitability, we can understand why General Motors is reluctant to make that investment. It is important that the management and work force should convince General Motors that it would be a wise move to make that investment. We must continue to underline the fact that Britain wants to keep its manufacturing ability. It is no use being a country that simply puts cars together. That is not manufacturing cars. Manufacturing cars means going right the way down the line. We must have our share in making engines and gearboxes. If we have to share that manufacture, fair enough.
General Motors aims to take about 15 per cent. of the British market. I hope that it succeeds. Presently, it has only 7·2 per cent. The number of cars that it is importing to meet that level is far too high. About 130,000 cars are manufactured in Britain and 45,000 imported. We must get away from that trend.
It is a striking fact that Vauxhall lost in the bid to build some parts of the new J car. We are told that General Motors can buy the engines cheaper from Australia and the gearboxes cheaper from Japan. Opel is in a similar position. It is amazing to think that engines and gearboxes from the other side of the world are coming into Britain and Europe cheaper than we can manufacture them ourselves.
What about new plant in Europe and Britain? General Motors says that it is not building new engine parts in Britain because the Austrians have offered a free site, free road and rail links and 33 per cent. construction costs. We cannot blame General Motors for choosing to go to Austria. I understand that similar offers have been made by Spain and Portugal. If Britain wants a share in the car manufacturing industry the Government and the nation must make some contribution towards catching that share. Even in our regional plans there is nothing that could offer the carrots to persuade companies to build plants in Britain.
We are seeing the erosion of manufacture in Britain. The leading role in car manufacture for General Motors is going to Europe. It is sad that we are losing skills, design and manufacture. Also sad is the loss of skills in putting together robots and all the modern technology associated

with cars. There is a loss of exports because we are not building the cars that could be manufactured in Britain and sold abroad.
A number of my colleagues have mentioned the loss of components. Luton is not the only place to suffer from that. British Steel is suffering in other parts of the country, as is Pilkington glass. The many small businesses that contribute nuts and bolts and bits and pieces for the cars have lost business because of sourcing from other parts of Europe.
Where do we go from here? We must accept that Vauxhall is part of a multinational company, as are Ford and Talbot. Ford has proved to be a success and there is every possibility that Vauxhall will prove to be successful. It is essential that the Government should encourage our arms of the large multinationals which succeed and back them in trying to persuade the multinationals to support them and provide further investment.
I hope that the bad relationships between managements and work forces are now a part of history. It is important to say so in this debate. There is now a sense of reality and we must ensure that we receive the full backing of the multinationals. We must take the path that lies ahead rather than harping on what happened in the past.
The Government should never again use the motor industry as a regulator for the economy. For too long we have tampered with hire purchase arrangements and taxation. I cannot understand why the motor car is singled out for a special tax. It is no longer a luxury. It is an essential, especially for those who live in country areas. It seems that we must have a motor car nowadays. It has become part of modern living. It is wrong that the motor car and the motor cycle should be penalised by additional taxation. Surely VAT is quite enough. It would be a great incentive to the industry if the additional taxation were removed fairly rapidly.
There is a great deal of talk about taxing company cars. Some Labour Members jump with delight at the thought of taxing those who have cars that are run on the companies that employ them. However, the majority of British companies that buy cars buy British cars. It is important to consider the implications of taxing company cars.
It is vital to reject schemes such as import controls or the compulsory manufacture of vehicles in Britain alone. I know that such schemes are favoured by the unions and the Labour Party. To take such a course would merely perpetuate our high costs and our overmanned production lines. Our object must be to become at least as efficient as the Japanese. Our car workers produce far fewer cars on average, in terms of man/hours per year, than Japanese workers. On that basis about six cars are produced in the United Kingdom as against 42 in Japan. That is a disgrace to an industrial nation such as Britain.
We cannot afford to make things worse by closing our market to competition. That would make us even more inefficient. As Britain is so dependent on exporting, our industry would lose far more from foreign retaliation than it could gain from the protection that import controls, for example, would offer.
The commitment of the General Motors Corporation to investment in Britain is welcome. The management and workers of Vauxhall need a secure future. It is not in their interests or in Britain's to have the range of tasks that they


perform reduced to mere assembly. We must ask General Motors to reconsider its global strategy as it bears on the United Kingdom.
We must encourage much better productivity at Vauxhall. The company must be able to make sufficiently high profits to enable it to gain a better return from its capital investment and to pay better wages to its work force. It must be able to generate investment in the company for the future. The Government must keep under constant review the incentives that our competitors offer and the impact of their taxation policies. If we want Vauxhall to be more successful, the management, the unions and the Government must create the necessary conditions so that the company can get on with the job of building motor cars.

Mr. Terry Davis: I have some sympathy with the argument of the hon. Member for Luton, East (Mr. Bright), who contended that the special tax on motor cars should be removed. However, there is little point in removing the tax if the extra sales go to importers. I disagree with his views on import controls. I believe that such controls are necessary. I much prefer the views of the hon. Member for Rugby (Mr. Pawsey). However, I would go further and advocate that import controls should be introduced for other countries as well as Japan.
The hon. Member for Liverpool, Edge Hill (Mr. Alton) was wrong to suggest that it has been claimed that import controls would be a cure for the problems of the motor industry. Import controls will not provide a cure. We need import controls to provide time for us to deal with the industry's problems. We also need import controls to protect the industry against unfair competition and to protect the country against the decisions of multinational companies, which make decisions that are based on their interests and not on the interests of Britain.
As we listened to what the Secretary of State said this afternoon it became clear that he blamed the loss of jobs in the motor industry on a lack of competitiveness in design and price. He blamed strikes, overmanning and bad working practices. He blamed low productivity. He blamed a failure to introduce new models. He blamed regional policy and the decision to locate factories on Merseyside and in Scotland. He blamed the actions of previous Governments. He blamed everyone and everything except himself and the Government for the loss of jobs in the industry during the past two years.
Somebody must answer the right hon. Gentleman, and I shall do so wall specifics and not generalities. Let us take two examples. First, let us consider the privately owned firm of Metro Cammell Weyman, which makes buses. I select this firm because the right hon. Gentleman referred to the decline in bus sales. Two years ago Metro Cammell Weyman was recruiting people to work in its bus factory in Birmingham. In the past few weeks it has declared redundancies of several hundred people.
The management has provided a number of reasons for the redundancies. No one has suggested that the reason lies with design problems. No one has suggested that the redundancies should be blamed on a lack of price competitiveness. No one has said that the redundancies are the result of strikes, overmanning and bad working practices.
The management has explained that the redundancies are due to factors that are the responsibility of the Government. It blames the general recession for a reduction in the number of people who travel by bus. It claims that the blame lies with the policies—Conservative policies—of cash limits and high interest rates, which have caused a reduction in orders for new buses. It says that the number of passengers carried by bus has declined because of the reduction in service mileages. None of those factors has anything to do with the reasons listed by the Secretary of State. Several hundred men and women will lose their jobs because of Government policies.
A second example is the publicly owned company of British Leyland, which has recently announced proposals to close the Rover factory at Solihull. If the closure goes ahead it will mean the loss of 2,100 jobs in Birmingham, Solihull and the surrounding area. The hon. Member for Liverpool, Garston (Mr. Thornton) described the empty Speke factory as a monument to all that is bad in the motor industry. The Rover factory at Solihull can be described as a monument to much that has been good in the industry. A new model was introduced at the factory five years ago and the design won on international award.
We cannot blame the proposed closure on a lack of design competitiveness. The Solihull plant is a new factory, so we cannot blame the proposed closure on a lack of investment. The management has not blamed low productivity. On the contrary, the work force has earned one of the highest productivity bonuses in BL cars. Finally, the management says that industrial relations are not to blame for the proposed closure.
The factory is threatened because it is making 700 cars per week when it has a capacity to make 3,000 cars per week. The management says that there are three factors that explain that low output. First, it blames price competitiveness, but it says that that is the result of the high value of the pound, which has affected imports into this country and exports from this country to the Continent, which was one of the key markets intended for the new Rover car. Secondly, it blames the recession and says that as a direct result there will be a reduction in the car market of 10 per cent. in 1982. Thirdly, it says that there is a further reduction in the market for the Rover car as a result of a shift to smaller cars, which is blamed by the management of British Leyland on the Budget and the increase in petrol tax.
Therefore, the management of British Leyland is not putting forward any of the reasons listed by the Secretary of State. I hope that we will be told whether the Government accept responsibility for their policies, which are causing the closure of the Rover factory at Solihull. If they do not accept the responsibility, it must be the responsibility of the British Leyland management. The management decided to build a factory that was capable of producing 3,000 cars a week. It was not the decision of Sir Michael Edwardes and his management team, but when they were appointed they endorsed that decision. Now they say that they cannot sell the cars. The result is that 2,100 people are likely to lose their jobs. If the management of British Leyland cannot sell as many cars as can be made, and if it is not the Government's fault, Sir Michael Edwardes should accept the responsibility for failing to sell and he should resign so that the Government can appoint someone who can sell the cars that can be made at that factory.
The Government cannot have it both ways. Either the management of British Leyland is responsible for the proposed closure of the Rover factory or the Government are responsible. I believe that both are responsible. British Leyland needs a new chairman, and Britain needs a new Government.

Mr. Hal Miller: I shall not follow my old adversary, now the hon. Member for Birmingham, Stechford (Mr. Davis), into his byways. I shall instead content myself with saying that the Metro Cammell Weyman bus project was set up because British Leyland was unable to deliver—he must have been aware of that—even with special inducement from the West Midlands county council. The Rover plant suffered serious over-capacity from the beginning, and the hon. Gentleman will also be aware of the paint problem. Now that the market conditions have changed it is not possible to sell cars of that size in the quantities originally envisaged. It is no good the hon. Gentleman trying to pin the blame for all those developments on my right hon. Friend the Secretary of State.
I am glad that the Labour Party has chosen the subject of the motor industry and has given us the opportunity for a full dress debate rather than our usual attempts in the middle of night on the Consolidated Fund Bill. However, the Labour Party has made a bad fist of it because, for example, it has left out one of the most important reasons for such a decline in the motor industry. That reason is inflation.
Inflation has destroyed the jobs and has undermined the industry. That is why I have so constantly supported the Government in their selection of the defeat of inflation as the first priority. We have been subjected to a raft of Labour arguments, with easy panaceas, such as import controls and multinational company restrictions, ignoring the contribution which the multinationals have made to our motor industry and ignoring the fact that many of those operations are able to continue only on the basis of imported cars. The cost structure in this country is too high for them to operate profitably otherwise, largely as a result of the inflation to which I have referred.
I have a host of figures from the Ford Motor Company to prove the point and to show that whereas it was relatively advantageous to make an Escort in Britain as recently as 1976, by this year that no longer applied. Our cost structure is much too high, so that it is possible to acquire a British model more cheaply on the Continent because it has to compete with the market structure there. So please do not let us be led into those easy byways and imagine that they will solve the motor industry's problems, which are real, although they reflect a number of the other problems to which hon. Members have referred.
I wish to develop my ideas on the need for a sector industrial policy rather than a regional policy, the effect of that on the West Midlands and the responsibility of the Government for creating the competitive climate in which alone our industry can flourish. I am having to shorten my remarks in view of the number of other hon. Members who wish to speak. I have already voiced my criticism of the Government in relation to British Steel—that there was no coherent Government sector plan for the steel industry. It

was left to Mr. Macgregor, on behalf of British Steel, to devise the plan for the whole industry regardless of the effect on private firms.
I am afraid that the same criticism can be levelled with regard to the motor industry and the treatment of British Leyland. The Government's financial support of BL appears to have been based on the BL corporate plan rather than on any view taken by the Government of the sector as a whole and regardless of the effect on other firms in that sector. It is important to ram home the need for such a Government view when we consider the application of Nissan to manufacture here. There is bound to be a considerable effect. We must have some ideas of where that impact will fall and whether any counter-measures need to be taken. It appears to me that the Nissan project would establish the manufacture of a company fleet car which would compete seriously with Ford, Vauxhall and the new BL model, the LM 10.
The Government must have some idea of the model which will be made, the quantities in which it will be produced and the export plans for it. Otherwise there is bound to be a serious prejudicial effect on existing British manufacturers, some of whom are supported largely with Government funds, and on BL or the Ford engine plant at Bridgend, which would be vitiated thereby.
There is also the question of the effect on the component industry. If the Japanese plant is allowed to use a high percentage of cheaper Japanese components because of the different cost structure in that country, the only way in which our assemblers would be able to compete would be by resorting to imports of components, with disastrous effects on the component industry and on the West Midlands.
I fear that the siting of the plant will be influenced by regional policy and by the grants available to the firm if it goes to a certain area. We are faced with the prospect of transferring employment from the West Midlands—and a lower level of employment being created because of the more modern methods of production—to another part of the country, putting more people out of work in the West Midlands, which is already suffering severely. There are a number of other considerations about the Nissan project—the need for design, and so on. I know that other hon. Members hope to discuss those considerations.
The West Midlands is crucially dependent on the motor industry for its employment and prosperity. At the moment it has the highest rising rate of unemployment in the country. Hon. Members do not understand that unemployment in Birmingham is already higher than in Glasgow or Liverpool. People do not take on board what has happened to the West Midlands. The rebuff experienced by the delegation this week at the hands of the Department of Industry, when it tried to bring home to the Department the problems of the West Midlands, was regrettable. The problem has to be worked on further, because the answer was not satisfactory.
I have departmental papers to support my belief that the West Midlands now qualifies, with its unemployment and long-term structural decline, for regional assistance. Either the regions should be given that assistance or the policy should be changed. I have advocated that the policy should be changed to one of supporting particular sectors, rather than being founded on a geographical basis, which is not in the interests of the country or of the industry. Indeed, my right hon. Friend referred to that aspect in his opening remarks.
The region has the highest dependence on employment in manufacturing of any part of the country—nearly 43 per cent., of which two-thirds is in the engineering and metal industries. Apart from the general high level of unemployment there is the high level of unemployment among youth—35 per cent. —and among blacks. People seem to think that racial problems are confined to London, but very serious problems are building up in the West Midlands.
In manufacturing, the region also has much the highest number of people on short-time working—one in four. That is one-third of the total in the country. Further serious and heavy redundancies are inevitable in the region. Only today we have witnessed the closure of the Rubery Owen plant in the Darlaston district.
Some members of the Government have said that manufacturing jobs will be replaced by service jobs. In the West Midlands, in 1980 alone, there was a loss of 27,000 service jobs. That goes to show that in the region service employment follows manufacturing employment rather than creating alternative opportunities. There is a structural decline similar to that in areas dependent on coal, steel, textiles or shipbuilding, which at the moment qualify for aid. So we have to develop a package to deal with the position in the West Midlands.
It has become fashionable to regard the motor industry as an albatross industry, to be discarded and allowed to go into decline in the hope that it will be replaced. The industry employs 450,000 people directly, accounts for 5 per cent. of the gross domestic product, and provides £4·25 billion of exports. If that is an albatross, let us have more albatrosses.
The motor vehicle industry can provide the engine for change that we need. It is interesting that my right hon. Friend's Department is developing a sector policy in high information technology. There is a Minister for the subject and programmes for spreading it round schools, and assistance is concentrated on it. If the higher information machines are to be applied successfully to our machine tools and our production processes, the motor vehicle industry offers a unique opportunity to produce the progress that needs to be made.
The Metro building plant at Longbridge contains over half the robot machines in the country. So there is a real opportunity to bring forward the rest of the electronic and other developments to which I have referred and at the same time to render our industry more competitive.
My right hon. Friend was right to refer to the need for profitable competitiveness. But he did not say that the Government -lave a responsibility in creating a competitive environment, quite apart from the efforts required from management and men.
I am well aware of the arguments that once upon a time a half-crown was referred to as "half a dollar", and that in those days we used to compete successfully all round the world. But with the declining European exchange rates it is so profitable to export to Britain that there is no basis on which we are enabled to compete satisfactorily at present. It is necessary only to mention that a Mercedes can be bought in Germany for between £6,500 and £7,000 and that the same car sells here for £11,000. That demonstrates the huge profit in making the cars in Germany and selling them here. I referred earlier to the way in which the Ford Motor Company has had to survive on just that basis, because we have not yet dealt with our problems.
The Government have a part to play in dealing with inflation. The loss of competitiveness on the exchange rate with Germany over the last five years has been 40 per cent., and with Japan 33 per cent.
My views on energy prices have already been made known, as have my views on support for the public sector at the expense of the private sector.
Industrial rates are proving a real burden. The Opposition—perhaps understandably—made no reference to the ills besetting manufacturing industry in the West Midlands, where the county council is proposing to levy a supplementary rate, to be followed by the Birmingham city council adding a further supplementary rate this autumn.
The Labour Party has offered no serious answer to the problems of the West Midlands or of the vehicle industry, any more than it has offered an answer to the problems of the country. But in the Conservative Party we must adopt a more positive attitude, realising that the motor vehicle industry provides us with the possibility of an engine for change. We cannot afford to adopt a "hands off' policy. We have to be involved and we have to have a basis for being involved.
I find great difficulty in understanding my right hon. Friend's attitude when he supports the steel industry without a coherent plan for it, and when he supports British Leyland without a coherent plan for the vehicle industry. I cannot understand how that policy is to be explained to the people. More leadership is required, and a more positive attitude has to be taken.
I confess my disappointment that the reaction to the BL support is "It is much cheaper than putting them on the dole". I am also disappointed that on the day when the Metro was being launched it was thought necessary to say "We have no idea whether it is a good car or not".
Being in politics involves giving a lead to the people. My feelings have been well summarised in a recent article in The Sunday Times, on 21 June, in which Hugo Young referred to the factor of popular consent, and For the difficulties being caused to people by the collapse of jobs, the closing of factories and the withering of services.
I believe that people still want our Government to succeed and that they accept the need to change. They know that the practices that have operated hitherto cannot continue for ever. But they are now beginning to entertain serious doubts about the leadership being provided. They cannot understand why, as Hugo Young says,
the government continues to dole out vast sums of money to public sector industries, but without either political sensitivity or strategic coherence. Such handouts could be seen and used in a positive light. Instead, Sir Keith and his prime minister speak of them with apologetic self-loathing".
I believe that we must have a partnership between Government and industry. The Government have a responsibility for creating a more competitive environment. They must pay attention to unemployment in the West Midlands and develop coherent policies for dealing with those aspects. I urge my right hon. Friend. most sincerely, either to do that or please make way for somebody who will.

Mr. Ted Fletcher: The House has seldom heard a more complacent speech than that delivered by the Secretary of State. The right hon. Gentleman reiterated the old slogans that the motor car industry must become more


competitive, that we must have a competitive edge and that workers must accept their responsibilities and work more economically and presumably for lower wages in order to compete in world markets. The right hon. Gentleman failed to touch upon the real problems in the car industry. He should be familiar with them. I am sure that, as Secretary of State, he has often had meetings with officials with the Society of Motor Manufacturers and Traders and Sir Michael Edwardes, who will have spelt out to him the real problems of the industry.
Hon. Members are familiar with those views. Sir Michael Edwardes has addressed hon. Members at the House. We have received correspondence from the Society of Motor Manufacturers and Traders setting out what the industry considers it needs from the Government. The industry asks that some action be taken about the high cost of the pound. This frustrates the exporting of models abroad and allows competitors to introduce models into this country at very much cheaper rates. The industry also protests about high interest charges which have a particular impact on the components industry. The motor car industry has contributed to the £1,400 million profit made by the big four banks because of high interest charges.
Another requirement—it is the one on which I want to concentrate—is selective import controls. The Secretary of State dealt with this important problem only at the tag-end of his speech. The right hon. Gentleman did not answer the questions put to him by my right hon. Friend the Member for Salford, West (Mr. Orme), who opened the debate. I should like to spell out the case for selective import controls. From a small surplus in 1970, the United Kingdom trade deficit with Japan rose to £1·1 billion in 1980. This year the deficit could be as high as £1·4 billion. I do not always agree with using these billions. I would prefer to express it as £1,400 million, representing the trade deficit with Japan.
Last year, British exports to Japan covered only 34 per cent. of imports. I am dealing with the totality of trade with Japan. The most publicised aspect is the import penetration in the vehicle sector. In April this year Japanese car imports amounted to 11½ per cent. of our home market. In the commercial sector, Japanese imports amounted to 29 per cent. for the period from January to April this year, compared to 17 per cent. in the corresponding period of last year. These statistics are supplied by the Society of Motor Manufacturers and Traders.
Numerous delegations representing the motor manufacturers have visited Japan to try to reach a mutual agreement to restrict imports of Japanese cars to this country. However, the assurances that were gained were ignored by the Japanese. The totals are well in excess of the promises that were made during the visits to Japan.
The EEC has also endeavoured to intervene. On 19 May of this year the European Council issued a statement expressing
serious concern at the present state of trade between Japan and the Community … the Community should emphasise once more to the Japanese authorities its preoccupations over the level and excessive concentration of Japanese exports in sensitive areas … The Japanese government should take positive steps to increase imports by Japan of Community products.
The Japanese ignore completely any representations received either from representatives of the trade in this country or from the EEC. Sir Roy Denman, the

Commissions's director of external relations, after a meeting with Mr. Kikuchi, of the Japanese Foreign Ministry, stated that the talks amounted to "pretty near zero". No progress can be made in negotiations with the Japanese.
What do the Japanese take in return? Our exports of cars to Japan for the month of April this year were valued at £300,000. On the basis that an average car costs £5,000, this means that we exported to Japan in April 60 cars. In the same period, the Japanese introduced over 14,000 cars into this country. On a cash basis, we exported cars to Japan in 1979 to a total value of £16 million. Imports of Japanese cars to Britain reached £308 million.
What attitude do other countries take towards the penetration of Japanese exports? France has decided to put a 3 per cent. limit on the number of Japanese cars entering the country. As a consequence, the number of cars that entered France was 47,000 against 180,000 imported into this country. The Italian Government have imposed a ceiling of 2,200 cars per year. In 1979 only 1,600 Japanese cars entered Italy. The number of cars imported into West Germany between January and August 1980 increased by 64 per cent. and the German Government are now considering a year's restriction on the import of Japanese cars. In Sweden there has been a 23 per cent. increase in the number of Japanese cars entering the country and the Swedish Government are in negotiation and are threatening the Japanese with restrictions on their imports.
I and the workers in the motor industry want to know what our Government will do to protect our workers against the penetration of Japanese cars in particular. I mention Japanese cars but we also have a problem with cars from the EEC, which possibly can be resolved only when we get out of the Common Market, as I hope we shall in the near future. The Government must face the question of the stand that we can take against the Japanese. If the other EEC countries can do it there is no reason why we should not protect our market by taking the same sort of action as they have taken.
Many Labour Members have long advocated selective import controls as part of an alternative economic policy. More than five years ago the Tribune Group issued a statement advocating selective import controls. It was largely ignored by the Labour Government at the time and, predictably, it was ignored by the Tories when they came to power. Such a policy has now become respectable at last. The CBI is in favour of it and the Society of Motor Manufacturers and Traders wants selective import controls. Even a Conservative Member has advocated a five-year moratorium on imports of Japanese cars, so some Government Members are prepared to accept a U-turn away from the obstinate policy of the Secretary of State. In the interests of the industry and of full employment we urge the Government to think again about restricting imports from Japan.
The enemies of the motor industry are not the workers in the industry. I remind the House, because of the many references that have been made about the strikes and industrial disputes in the industry, that the workers of British Leyland have for two years accepted wage increases below the average rate of increases in industry generally. The enemies of the car industry are not the workers or the management, who can see clearly the obstacles to expansion. The real enemy of the industry is


the Secretary of State. The sooner he resigns the better it will be for our economy generally and for the motor industry in particular.

Mr. David Gilroy Bevan: My constituency of Birmingham, Yardley, is surrounded by and embraces many British Leyland car plants, and a few yards up the road there is the Rover plant that is to be closed.
This has been a fascinating debate, and I appreciate many of the points that have been made. The hon. Member for Newport (Mr. Hughes) said that he had experience of the DS 1. the Rover car that I drive. To judge from his absence, it looks as though he likes it so much that he has gone to have another drive in it. It is a good car, and I should like to see certain matters concerning it redressed. That is not to say that I agree with the wording of the amendment, although I agree and have some sympathy with Members on both sides of the House who are frightened and worried about the British car and component business.
I do not think that Government policy is entirely wrong, but surely part of it must be wrong, or the collective implications of what happens by virtue of its not having been remedied must be wrong. The decisions of successive Governments from the early 1960s onwards, and the Labour Government led thereafter by the right hon. Member for Huyton (Sir H. Wilson), must have been wrong. The policies that were aggregated, inherited and perpetuated must be wrong in certain respects.
It is no answer to say that there must be tariff barriers. That will affect nothing. It will be counter-productive. Indeed, there will eventually be a world rebuttal of those who put up tariff barriers against us. Temporary expedients and temporary restrictions are the politics of desperation, but they become progressively more attractive as the situation worsens.
I remind the House that the Italians, who have been so much quoted, had a bilateral treaty with Japan prior to entering the Common Market, and when they signed the Treaty of Rome they insisted that that agreement should be honoured and included. We were not around to make a similar stipulation. We know the Frenchman's normal de Gaullean sang froid and bloody-mindedness. He, of course, is making the administration of the entry of Japanese cars as difficult as possible.
Over the past decade Britain's capacity has been reduced to almost 50 per cent. In a similar period, Japanese capacity has risen roughly ninefold. Moreover, as has been said, we were importing precisely that amount from two European manufacturers. I point out to the hon. Member for Darlington (Mr. Fletcher) that the voluntary agreement that we have with Japan at about 11 per cent. is almost on target. It is about ½ per cent. off, and we hope that it will shortly be completely on target.
In the present situation we might well be as difficult as the Japanese in the administration of what they import and be as perpetually partisan as the French. I suggest that we should, if that is the medium that we have to use to achieve a more reasonable balance.
I am not so much concerned, however, with international or even national policy, except, as I have said, to the extent that since the early 1960s it has resulted in injury to my part of the world—the heartland of Britain, the iron heart of England, the motor manufacturing centre

of this country. It is particularly harming my constituency of Yardley, where I suspect that the majority of the 2,000 people at the Rover plant currently live, and possibly many of the 2,000 others who will be thrown out of work as a result of its closure.
My part of the country has from time immemorial been a manufacturing centre—from swords to buttons, through the whole range of metal goods to carriages and then motor cars and bicycles. With the grant of assisted status to other parts of the country and the restriction of IDCs in the past, my area has been particularly disadvantaged. Yet no other area has been particularly advantaged. The strategic decision to remove car manufacturing from the West Midlands, which was taken in the 1960s and has been carried through, has not assisted other regions. It has not benefited Cowley. Nor has it benefited Speke or Linwood. Many of those plants have closed. But it has certainly disbenefited Birmingham and the West Midlands.
The dictum adopted by successive Governments of "strengthening the weak" has come back like a boomerang to "weaken the strong", and the strong are now themselves very weak. Of four car manufacturing companies in this country, three are now foreign.
We are in danger of becoming mere assemblers of offshore Meccano sets—foreign motor jigsaw puzzles—with an unknown quantum in respect of British components. The car components industry is already decimated, particularly in Birmingham, where at the beginning of this year I undertook an examination of small and medium-sized components firms. Many of those companies do not know where their next orders will come from. In many cases, they do not know where next week's wage bill will come from. On top of that, we have heard the news today that Rubery Owen, whose largest customer was BL, is closing down, with the loss of another 1,000 jobs.
The West Midlands must retain its skills, work force, designs and genius. They must not be diminished by dissipation to those industries abroad which in the main were subsidised by American aid immediately after the war. American money was pumped in in vast quantities, which provided those industries with new plants and factories and gave them a basis for building motor cars that Britain did not possess. Except in a few cases we carried on with our old outworn plant. In those circumstances it is no wonder that those companies could achieve a higher degree of productivity. Of course they found it easier to produce. As a result, labour relations were better than ours.
Bus production has been transferred, for example, from Coventry to Cumberland, with resultant inefficiency and job losses in the West Midlands. My neighbour, the hon. Member for Birmingham, Stechford (Mr. Davis) referred to the Metro Cammell bus. In my previous capacity as chairman of the transport committee in the West Midlands I had the honour of ordering several million pounds worth of those buses to get them into use, and very good buses they are. As a result of Birmingham and the West Midlands ordering mainly Metro Cammell buses, a few redundancies will be avoided.
Production of the TR7 has been all around the place. It went to Cowley, to Solihull, and then to Speke, and it is now to die. We have seen the demise of the MG for no apparent reason, at a time when customers are buying a copy that is selling like wildfire in the United States.
Rover, possibly helped by the falling value of the pound, has picked up 82 per cent. more American orders during the past year. Those astounding facts are before us.
In addition, Birmingham possesses an indigenous industrial genius. Many hon. Members have spoken about research and development. Great things are happening in the West Midlands. There is experimentation by Lucas with electric cars, which will perhaps take five years to develop. If there is a breakthrough with a smaller battery, my word, what ramifications there will be.
There have also been new concepts for motor cars, such as revolutionary engines like the Wainwright Butterfly. There has been the development of a gearbox by a totally new method. The box will be placed where the differential is now located. There has been the development of a sub-floor mounting for the engine, which will allow for left-or right-hand drive. Revolutionary new ideas in ignition, such as plasma arc burning, have already been developed and are available.
If it is moral to preserve and back the nationalised sector so that it is given a chance, it is equally moral that a tithe of the amounts that go into that sector should go into the private sector. If my hon. Friend the Minister would like to know, I should be happy to suggest the companies that could benefit. If he wished to hold industry's hands there might be a splendid partnership.
I speak for Yardley. Birmingham used to be a city of 1,000 trades. It was car-oriented. Hon. Members ask that our skilled workers should not be made redundant and should not be sold to the highest overseas bidder. We must look carefully to find where our Achilles heel is and to see whether, by exposing it, a shaft will be fired into it that will do irreparable harm—even worse than that experienced today—to the industry.
I am banging a drum for Birmingham, which has been mortally wounded by a geographical disprivilege that has been sustained by successive Governments. The famous Austin 7 was made by a Birmingham entrepreneur in a garage in one of the town's back streets. Such activities could still be fostered. I drive the car that was called "The Car of the Year" the Rover 3.5, and it is excellent. It does not need to be replaced by an alternative model at this stage. It does not need to be moved to Cowley, when there is an engine and body shop a couple of miles away in Castle Bromwich.
I bang the gong for Birmingham and I yell for Yardley. My people can and should work. The grand strategy to remove the car manufacturing capability from the West Midlands is wrong. Our growing rate of unemployment is at least three times that of any other area in the United Kingdom. At present, unemployment in Birmingham amounts to 13·4 per cent. Opposition Members pointed out that unemployment might rise to 30 per cent. God help us all if that happens.
About 10 years ago British manufacturers made 40 per cent. of the cars sold in Britain. They now make half that amount. No one believes in interfering with industry. Let managers manage. However, when the Government invest £1 billion they are in the position of a bank manager, standing behind a company chairman. The bank manager is entitled to tell the chairman, that, having put up the money, he does not expect to see one of his finest plants immediately closed and some of his most skilled people put out of work.
I commend a series of articles on the Rover DS 1 that appeared in the Birmingham Evening Mail. Indeed, I recommend that my hon. Friend the Minister looks at them. I refer in particular to the magnificent editorial in this morning's Birmingham Post. We must follow a trade policy of some sort, but it must be based on repricocity. There must be some element of an eye for an eye and a tooth for a tooth. The value of the barter between the two willing parties must have some indentity. We are worried, because the imbalance is growing. If it continues to grow I shall, regretfully, have to rechristen my constituency "Hardly—hardly any work". Birmingham is fast becoming "Blightedham" and the West Midlands will have to be renamed "the Mid Wastelands".

Mr. Deputy Speaker: I remind the House that the Front Bench speakers are due to begin at ten minutes past Nine o'clock.

Miss Jo Richardson: I am not sure whether the hon. Member for Birmingham, Yardley (Mr. Bevan) ended by calling for import controls, but at least he referred to them. I am glad that he did, because I intend to concentrate on the need for import controls on a selective basis.
No other country allows such free access to vehicles as Britain. Nobody would disagree with that. The recent report on imports and exports by the Select Committee on Industry and Trade issued some weeks ago shows that we are the worst "sucker" market for other people's vehicles in the world. There is no dispute about that.
The penetration of Japanese cars into France and Italy is a small fraction of the penetration of Japanese cars into Britain. The penetration of British cars into the Japanese market is even smaller. Many people, including some members of the Labour Party, say that if we impose import controls we shall export unemployment and open up the danger of retaliation. However, other countries have already retaliated against import controls that we have not imposed.
Many countries, including our EEC partners, impose technical standards on heavy commercial vehicles which are supposed to be for safety or environment purposes. For example, the Japanese place a width restriction on their imports of heavy vehicles. Such standards are obstacles to importing vehicles from Britain.
By contrast, we do not seem to require any such controls on vehicles entering Britain. I wish that we did impose controls for safety and environmental purposes. My constituency is on the route to the coast. Many residential roads are cluttered with lorries coming in and going out of the country, either to deliver or to collect goods. My constituents would be pleased if proper environmental standards were imposed on the importation and use of foreign lorries in Britain.
Only a week or two ago, I am sad to say, a 3-year-old child was killed by a lorry in my constituency. There is a big movement, and the beginnings of an understanding, among ordinary people who wish proper safety and environmental standards to be imposed.
A sensible Government would take an overall view of the British motor industry, as do the Governments of France and Italy. At it is, apart from Ford, every British vehicle manufacturer takes its turn to be threatened with extinction. Many of my constituents work at Ford's


factory in Dagenham. The factory is smack in the middle of my constituency. Even that company is under a permanent potential threat because its destiny is decided not in Dagenham but in Detroit. The workers have no real security for their futures.
My right hon. Friend the Member for Salford, West (Mr. Orme) referred to the need to deal with multinational companies by planning agreements. That is relevant. It would certainly give assurance and security to the people at the Ford plant in my constituency. That company has a good export record. It claims to import little. However, it imports the Euro built-up car. It produces the finished built-up car, such as the Fiesta or the Cortina, which is made in several other countries. The ultimate country of destination is determined by the manufacturing company's overall strategy. Euro built-up imports are, in a sense, imports of no fixed abode. No one quite knows where they come from. For example, if one buys a Fiesta from Dagenham one does not know whether it has come from Dagenham or Valencia. When I ordered a car from Dagenham I thought it had come from Valencia but I was very pleased to find a small plate inside saying -Made in Britain".
The decline is of great concern to the shop stewards and the workers in the motor industry. I beg the House not to brush off the feelings of the workers as being unconcerned about the future of their industry. They are not only concerned for the future of the motor vehicle industry—they are more sophisticated than that. They understand that if the motor vehicle industry goes down so will others, such as the machine tool industry and the steel industry. They are concerned, and the effect of the collapse of the vehicle industry is well understood by them. We must not make the mistake of believing that they do not understand that it is the Government's monetary policy that has made the imported vehicle cheaper while simultaneously forcing up the price of vehicles exported from the United Kingdom.
Belgium restricts imports. The French limit vehicle imports to 3 per cent. of their domestic market. The Italians allow imports on a one-to-one basis. As I have said, the Japanese impose a safeguard through width limits on road vehicles. The Spanish Government virtually forbid the import of any vehicles.
The Government must see that we must control import penetration. If they do not they are blinding themselves to the stark truth that our motor vehicle industry will collapse altogether. Every hon. Member has underlined our need for a healthy, rapidly developing vehicle industry. The control of import penetration, alongside other policies which other hon. Members have mentioned, will give us what has been referred to as a breathing space to get our motor vehicle industry on to a more thriving basis.
This has been a useful airing of views about the motor industry. I hope that my hon. Friends will support the Opposition motion.

Mr. John Stokes: This has been an interesting and sombre debate. In spite of what some Opposition Members and my colleagues have said. I believe, with Shakespeare, that our faults lie in ourselves and not in our stars. The problems of the British car industry are part of the problems of British industry, added to which BL is a nationalised industry.
The answer to those serious problems lies not in anything that we say here but in the car industry itself and the men and women who work in the research, design and development departments, on the assembly line, in the engineering workshops, in the sales offices and in the distribution centres. The success of the industry depends upon the quality of people employed.
I shall concentrate my speech on BL, which is the heart of my constituency. Before the war, to work at Austin or Morris was considered a privilege. Under the original leaders the firms grew and developed as highly respected British manufacturers. People at Longbridge still say "I work at the Austin".
When the pioneers died, new men came along, and after that we had the huge amalgamations. Looking back, one sees that it was a disastrous mistake to put the bus and truck divisions of Leyland with the volume car business of Austin and Morris and the prestige cars of Daimler, Jaguar and Rover. I still hope that one day these divisions will be split and private enterprise will have a chance either to take them over or at least to have a share in them.
Returning to the people employed in BL, after the war there was a great demand for labour in the industry. Wage rates were pushed up too high, and discipline became poor. Too much money for too little work does not make for happiness or contentment. Productivity became appalling, and labour relations as bad, especially in the car divisions.
I salute Sir Michael Edwardes for what he is doing and what he is trying to do. I hope that he will take a leaf out of General Montgomery's book. Monty won his battles because he gave the highest priority to training, morale, and leadership. He spent much time choosing commanders down to quite low levels. He was ruthless in rooting out failures. It is that single-mindedness that is now required if BL is to return to profit.
At a time when the surface fleet of the Royal Navy is being cut severely, when the universities' budgets may be reduced by up to one-quarter and when such vital services as the BBC's overseas broadcasts are being reduced for the sake of economy—and economies must be made—we have to ask ourselves whether we can go on pouring millions of pounds into the motor industry year by year, let alone into steel and all the other nationalised industries.
The splendid Metro is still not yet making a profit. Two more volume cars are to come, on which a great deal depends. The competition from Europe is fierce, and from Japan it is devastating. I hate import controls, and I cannot believe that English people are inferior to Frenchmen, Germans and Italians in making cars or, for that matter, anything else. We have as much brain power here as there is in any other country. All that we need do is translate that brain power into making products that the British public as well as foreigners will want to buy.
As we heard in the impressive speech by my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd), the competition from Japan, not only for us but for all the countries of the EEC, is so formidable, not to say terrifying, that it is clear that special temporary measures will have to be continued until we can build up our own productivity.
In the last analysis, however, I do not believe that the problems of BL are primarily technical. They do not lie in design, though in the past design has sometimes been poor. They do not lie in buying or in machine tools. The


Metro and the new Acclaim have the most modern production tooling. The problems lie in the human element.
BL's workers are just like any others. Most of them are the salt of the earth. The English will not be bullied, and they cannot be dragooned, but they can be led. Leadership is required not only at the top but in the middle ranks, right down to junior manager, foreman and chargehand. Despite the smirks that we see occasionally on the faces of Opposition Members, I believe that our motor car industry and industry generally can learn a great deal about leadership from officers and NCOs at present serving in the Armed Forces.
When BL recruits again, the company needs the best people available. In the past, the motor industry hardly ever employed a graduate. I am the last person to say that leadership is found only among graduates. We get leadership from every type of person, including those splendid people who leave school at the age of 16 and go on to part-time education. However, some graduates are needed in the motor industry.
Somehow, Sir Michael has to make British Leyland into a corps d'elite of British industry. It should be a privilege to work there, and every man or woman who does should feel proud of the fact. That is the attitude that has to develop in BL.

Mr. Pawsey: It exists in Japan.

Mr. Stokes: My hon. Friend the Member for Rugby (Mr. Pawsey) is right to say that it exists in Japan. One of the justifications for pouring so much money into BL is to protect the jobs of the component manufacturers, of which I have so many in my constituency. In the end, to secure a long-term viable future, the component manufacturers want a sound and viable car industry that can stand on its own feet.
The crisis in the car industry is part of the crisis of British industry and part of the crisis of our nation. We are reaching the point of no return. If we do not survive this slump in better shape in manufacturing industry, there is little hope for us as a manufacturing nation. Have we, as a nation, with our great history and all the troubles that we have overcome, really lost the will to win? Can we have been the leaders in the Industrial Revolution 200 years ago only to be the laggards now? The motor industry should be the spearhead of British industry, leading not only in exports but in the home market.
An enormous responsibility rests on management, at all levels, to take care of its employees, to tell them what is happening and, above all, to praise them when they do well. English people will always respond in a crisis when the facts are put squarely to them. We are in a crisis now. The taxpayers' patience will soon become exhausted if still more enormous sums are demanded by BL.
The trade union leaders must consider the true long-term interests of the men, which I believe are the same as the interests of the nation. Stoppages at work, however short, must be a thing of the past. A supreme effort is now required in BL to lift productivity to much more competitive levels, including work on the new Metro and its brand new plant. The new designs must be of the finest. Salesmanship must be intelligent and vigorous. If all pull

together in that great enterprise, BL could still surprise the world. We must devoutly pray that that change of heart will soon come about.

Mr. David Stoddart: The hon. Member for Halesowen and Stourbridge (Mr. Stokes) opened his remarks with a quotation from Shakespeare's Julius Caesar:
The fault, dear Brutus, is not in the stars, But in ourselves".
That was something that Cassius said to Brutus before he stabbed Caesar in the back. That is precisely what the Tory Party has been doing to BL since 1975.
I sympathise with the hon. Member for Bromsgrove and Redditch (Mr. Miller), because he comes from the West Midlands, and it was that area to which the Tory propagada of greed and self-interest was directed during the last election. Indeed, he accused the Government Front Bench of putting an albatross around BL's's neck.

Mr. Hal Miller: I never accused the Government of doing anything of the sort. I said that the car industry had a great role to play and that if some people considered it to be an albatross, I just wished that we had more albatrosses to provide the same amount of experts, employment and GDP.

Mr. Stoddart: The hon. Gentleman was looking at his Front Bench when he uttered those words. Perhaps I misinterpreted them. In 1975, during the rescue operation for British Leyland launched by Labour, Conservative Members criticised BL and advocated that no assistance should be given to save the British car industry and the jobs of their constituents.
Although Swindon is renowned for its railway works and railway engines, it has a British Leyland factory. It has enjoyed extremely good labour relations for a long period, even though Swindon workers have been paid rather less than those in other British Leyland factories. Despite that fact, and despite the closure of the Triumph and Rover factories, the Swindon factory is to lose even more jobs. To date it has lost more than 1,000 jobs since the Government took office.
The problems of the British car industry go back a long way. It is no good blaming British Leyland and saying that the reason for all the problems is that it is a nationalised industry. Hon. Members on both sides of the House know that that simply is not true. The fault goes back a long way. When the rationalisation in the industry took place investment should have been made in new plant, equipment and models. That investment was not made. At a time when there was a great need for additional investment, when overseas car factories were spending a great deal of money refurbishing plant and equipment, the privately-owned British car industry was still distributing profits that should have been ploughed back into the industry.
When that rationalisation took place the leadership to which the hon. Member for Halesowen and Stourbridge referred did not come from the top. The merging of the industry was not followed by the measures that were necessary and the rationalisation that should have taken place. Management continued in the same way as it had before. It was weak-kneed. It did not lead the workers as it should have. It did not lead them to adopt the new methods and machinery that were necessary to meet the


competition that was emerging in Europe, Japan, America and other countries. The tragedy of the British car industry—British Leyland, as we now know —was the failure of leadership and the failure of the system in which Conservative Members believe—the system of laissez-faire.
We have heard a great deal today about Japanese competition. At the same time we have heard about the establishment of Japanese factories in Britain. How hypocritical can we be? We criticise the Japanese for exporting cars to Britain—at a lower level than to many other countries—while at the same time local authorities throughout Britain, including the Midlands are trying to attract the Nissan factory, which will be in direct competition with our car industry. Not only is that hypocritical; it is against the best interests of the British car industry and its workers.
It has already been said that we are prone to attack the Japanese for their import penetration of our car market. However, we forget that import penetration from the EEC is three times as great. I remember during the 1975 referendum campaign a letter being written by the then Sir Donald Stokes, who has been transmogrified and now sits in another place down the passage as Lord Stokes, and sent to all my car worker constituents. It claimed that if we entered the Common Market everything would be hunky-dory. My car workers were told that Britain would be exporting many more cars and that there would be a great future for British Leyland and the car industry generally. They were told that they would be exporting cars all over the place.
None of that has come about. Since we became a member of the Common Market our exports have fallen by more than a half and EEC imports to Britain have more than doubled.

Mr. Tebbit: Why?

Mr. Stoddart: One of the reasons is that other member States received preferential treatment by the removal of tariffs when vie entered the market. Any fool could have seen that by studying the figures. However, many did not consider the facts. They relied on emotion.
The greatest import penetration is from the Common Market. It is vital that Britain has a managed trade policy. Conservative Members who represent car constituencies should understand that. There is a limit to which a country can absorb imports. If we do not understand that we can absorb imports only to the extent that our gross domestic product increases and enables us to pay for them, we shall be heading for ruin and bankruptcy. It is the entitlement of every country to ensure that there is managed trade and that indigenous industries are not wrecked by unfair and unrestricted competition from abroad, from wherever it may be.
We have much to do in the car industry and elsewhere. We need new models. We need additional investment in the industry. Above all, we need to praise our industry and to give those working in it every encouragement. We should not knock our products at every tiff and turn. We should be praising British cars. We should be praising British management. We should be praising British workers. Given the opportunities and given the leadership, our workers have proved time and time again that they can bring forward goods and services that are at least equal to, and in most instances better than, anything produced anywhere else in the world.

Mr. Jocelyn Cadbury: I am happy to agree with the last statement made by the hon. Member for Swindon (Mr. Stoddart) if not with the remarks that preceded it. We should praise our car industry.

Mrs. Elaine Kellett-Bowman: And buy its products.

Mr. Cadbury: A few weeks ago the car workers in my constituency produced the one hundred thousandth Mini Metro. As my right hon. Friend the Secretary of Stare said, the car is a success story. It was produced on time. It is being produced at the planned production levels and it is high quality. Its ultimate success will depend on how well it sells in Europe.
The significance of this success story goes beyond Longbridge. It demonstrates that with strong management and the co-operation of the work force Britain can still produce a car that is competitive in design and quality with the best automotive products of Europe.
I agree with some of the things that my hon. Friend the Member for Bromsgrove and Redditch (Mr. Millet.) said. The Government have supported the British car industry. Precious little credit has been given by the Opposition for the £800 million or £900 million in loans that was given to British Leyland by the Government. However, I want to see a more coherent strategy for the car industry pursued by the Government. I shall refer in particular to the need for more help for research and development. I welcome the aid that has been given to British Leyland to bring out new models, but the fact is that other Governments are giving more aid in research and development to their car industries.
If one goes down to the British Leyland technology centre at Gaydon, one will find interesting and exciting work being done in the development of fuel economy and in the use of alternative fuels, such as mixing alcohol with petrol, liquid petroleum gas, and so on. However, the centre is receiving only about £500,000 a year from the Government in aid. If one compares that with what is going on in France, Germany and the United States, one will find a different picture. For example, in France the French Government from March 1980 allocated £90 million over 10 years to Renault, Peugeot and Matra, to improve the fuel economy of cars, with a target of 94 miles per gallon. There is the same story in Germany, where, in 1977, £35 million of Government aid was given over four years to Volkswagen, Daimler-Benz and Porsche to develop a safety car, with the result that the VW 2000 has just been produced.
The Government should give more money for research and development to Britain's car makers because, while it may be possible for us to catch up in productivity in the next few years, we cannot afford to slip behind in technological lead. We have to keep our technological lead, because otherwise there will be no car industry.
I shall return to what my right hon. Friend said at the beginning of the debate. In the end, the British car industry will survive only if it is successful in raising its productivity in line with our foreign competitors. It will succeed only if it is capable of producing cars at the right price, of the right quality, of the right design and on time.

Mr. John Silkin: This has been a worthwhile and interesting debate. If I may say so after a Session's leave from industry Supply debates, it is fascinating to come back to listen to the Secretary of State and observe that the old magician is still at it. I observed that he was very much still at it from the moment that he moved the amendment to the motion. The motion deals with the vital question: should we have a motor vehicle industry at all in this country, and, if so, should the Government be prepared to intervene to safeguard it? That is what we are talking about.
The right hon. Gentleman's amendment and his speech were as neutral as they could possibly be. He leaned neither one way nor the other, but just castigated everyone.
It is interesting that the right hon. Gentleman knows that he has the reputation for it, and therefore he has to be tough and unyielding. Of course, he is nothing of the sort. His hon. Friends are an important part of his life. As Halifax, the seventeenth century pamphleteer, said:
Nothing is more frail than a man too far engaged in wet popularity.
Therefore, the right hon. Gentleman has to be dry. The result is that he is always consistent in everything that he says, and totally inconsistent in everything that he does. That is why, during the past eight or nine months since I stopped Shadowing the right hon. Gentleman, I have not known how many thousands of millions of pounds of public money he has been putting into the nationalised industries, wringing his hands the whole time, doing it far too late and not enough, but doing it all the same. But at least there is consistency in everything that the right hon. Gentleman says, and I believe that he wants to see a motor car industry in this country, for all the neutrality in his speech.
That cannot be said of the magnificent campaigners on the Social Democratic Party Bench. [HON. MEMBERS: "Where are they?"] My hon. Friends ask where they are, and that is a shrewd question. Unfortunately for the Social Democrats, not many of my hon. Friends have marginal seats in the West Midlands to defend, unlike some Conservative Members. [Interruption.] Those Conservative seats are marginal now, believe me.
I was referring to the Social Democratic Party, and I should like to quote its view on the British motor car industry. Mrs. Shirley Williams, in "Politics is for People", said, on page 196:
The weakness of the manufacturing sector … is a consequence of Britain's declining competitivity in making cars, even for the home market, and in particular of the appalling record of one huge corporation, British Leyland.
That is very different from what was being said a few moments ago.
The serious imbalance in trade in cars is responsible for most of the deterioration in Britain's manufacturing trade balance".
Are motor cars manufactured in Warrington? I do not think so. Warrington manufactures steel, plastics, paper and board, and wire. There is even a brewery there. They are all good products, but they have all been suffering as a result of a decline in industry, and none of the industries is related to motor cars.
The motor vehicle industry has to be related to the industrial position as a whole. That is because, apart from anything else, it is vital to our economy. My hon. Friend the Member for Barking (Miss Richardson) said that the motor car industry was the basis of the machine tool

industry—she might have added the engineering industry—of our country. Motor vehicles are vital to road haulage and distribution.
The motor vehicle industry, directly and indirectly, accounts for 8 per cent. of the gross domestic product, and not for 5 per cent., as the hon. Member for Bromsgrove and Redditch (Mr. Miller) said. He was quoting the Society of Motor Manufacturers and Traders' figure. It is 8 per cent. if one adds in the indirect figure. That is a formidable percentage. Eight thousand suppliers supply parts to the typical United Kingdom car firm. It is interesting to note that 375 firms supply 3,500 components to British Leyland for the Mini Metro alone. That is an enormous variety, and it is of enormous importance.
As my hon. Friend the Member for Swindon (Mr. Stoddart) said, when we consider the decline in the motor car industry we have to go back a long way. How did it arise? Ten years ago the British motor car industry was an export leader. The three great sellers abroad, up to 10 years ago, were motor cars, textiles and whisky. The motor vehicle industry had been an engine of growth—to use the phrase of the hon. Member for Bromsgrove and Redditch—in the 1950s. But between 1964 and 1972, partly as a result of the under-investment of the 1950s, import penetration began to rise.
I think that it was my hon. Friend the Member for Newport (Mr. Hughes) who said that as late as 10 years ago seven cars in eight on British roads were British. Today, fewer than half of them are, hence the plant closures and the job losses. The Secretary of State said that we still have a balance in our favour on components—I think that he said a surplus—but if he takes the balance of foreign trade in motor products and vehicles, plus accessories, he will find that we entered a £300 million deficit last year for the first time. Many factors explain why that has happened. They apply in many respects to all industries. They are important, above all, in the motor car industry.
I agree with the Secretary of State that we entered 1970 with an ageing model range. I believe that insufficient attention had been paid to new product development in the preceding decade of the 1960s. Productivity was not as good as it should have been. In many cases, but not invariably, this was due to bad industrial relations. It was also due, and still is due, to an inability to continue the supply lines and the conveyor belt in the way adopted by the Japanese, who have a genius or a meticulousness for this activity that we do not possess to the same extent.
It is true that there have been strikes. There have been silly strikes. However, it takes two to make a quarrel. Although we may have had a record on strikes— [Interruption.] Before the Minister of State laughs on the other side of his face he might listen. It is important, and he will have to reply to the debate in a minute.

Mr. Tebbit: rose——

Mr. Silkin: In a minute, I said. Although there were strikes, the fact is that we had the best record on absenteeism in the whole of the developed world. The hon. Gentleman has to answer that. It seems to me that if one has a bad record on strikes but a very good record on absenteeism the fault must lie to a great degree with management—a great deal more than with the unions. Otherwise, there would be a bad record in both strikes and absenteeism.
I do not disagree with the right hon. Gentleman's argument about overmanning in some car plants. That is true. I can think of two motor car companies in which that was true. II: was not, however, universally true. Throughout the car industry the real difficulty was under-capitalisation. That has almost the same effect as overmanning. Output volumes have been too small in our car industry fully to exploit economies of scale. Is not an inability fully to exploit economies of scale the same as overmanning? I suggest that it is.
Another factor that caused decline was the United Kingdom's entry into the EEC. Apart from anything else, the removal al import tariffs on vehicles exposed an already damaged and fragile United Kingdom industry to EEC competition, leading to import penetration from Germany, Belgium and Italy especially. Reference has been made to Lord Stokes—then Sir Donald Stokes—who was already presiding over a sickening company and a sickening industry. When he thought that British cars would go into every capital in Europe if we joined the EEC he was woefully mistaken. The reverse has happened. Every foreign car is now in the capital of Britain.
Hon. Members have made a great deal of Japanese imports. The truth is that these have stabilised at about 11 per cent. While there is ground for some complaint, the real complaint is the vast protection area of the EEC into which Japanese cars have come. 1 shall not take lectures from pro-European fanatics about protection in this country, when we belong to the most protective economic community in the world. I agree that their exports should be controlled, but the Japanese have, by and large, played the game. That is more than can be said of the EEC.
Let us look at the question of import controls, because we need to consider it and decide what we are to do. To hear some of the talk about import controls one would think that they had never been imposed in the history of this country, and that if we were to impose them the most terrible organs of retaliation would be set up.
My hon. Friend the Member for Barking said that that was nonsense In a fascinating phrase she said that the retaliation had already started, even before the imposition of import controls. She mentioned Spain, and she was obviously thinking of the Fiesta. I am sure that one or two hon. Members occasionally have a glass of whisky. If they have a glass of whisky in Spain, it will be whisky made in Spain under licence. It will not be imported, because Spain does not permit imports. It would be difficult to assess the retaliation if we controlled the level of imports of Fiesta cars from, say, Spain.
I deal next with the novelty of import controls. They can come in many shapes and forms. There can be import control by way of quotas, and one that says that a certain percentage of component parts must be made in the destination country. But is there not a third—an import control by tariff?
That is as much an import control as the others. I take it that the right hon. Gentleman would agree with me.
If that is so, what is so novel about import controls? I have said that in the 1950s British motor cars were an export leader. They were the wealth of Britain. Up to 1966 we had an import duty on foreign cars of 33 per cent. During the 1960s we began to reduce that tariff. By 1968 it had fallen to 22 per cent., and by 1972 to 11 per cent. By 1977, only four years ago, under the transitional

provisions we introduced a zero duty for cars from the EEC. In other words, up to July 1977 there was a duty even on EEC cars coming into this country.
What on earth is so novel or extraordinary about impart controls? They are imposed to protect an industry that needs to be protected. That brings us to the present time, but, as my hon. Friend the Member for Coventry. North-West (Mr. Robinson) pointed out, and as my hon. Friend the Member for Birmingham, Stechford (Mr. Davis) said in a vigorous speech, the Government cannot give themselves an alibi, even if it is true that the decline has been going on for some time. I accept that. We must be reasonable. But the deliberate policies of the Government have made the position catastrophically worse. What was already an industry in grave difficulty has become one whose survival we have been discussing and arguing about amongst ourselves. In a thoughtful and interesting speech, the hon. Member for Aldridge-Brownhills (Mr. Shepherd) debated that question with himself and with the House.
The facts that have made it a difficult question for us to decide relate to the action of the Government in the past two years. The high exchange rate, the high interest rate and the lack of investment have all played their part in the decline of British industry in general, and the motor industry in particular. What should we do now? The right hon. Gentleman is in the habit of asking what we should do. He says that the Opposition merely attack his policy, but if we put forward our own policy, he says that we have too much policy.
We cannot please everyone, but I hope that I shall take the right hon. Gentleman some of the way with me on this. We should maintain restrictions on Japanese imports, but we should also understand, as my hon. Friend the Member for Swindon pointed out, that three times as many motor vehicles are imported from the EEC in any one year as come from Japan. The danger is not from Japan. It is far more from the EEC.
Secondly, we should reject calls, even if they come from The Daily Telegraph, as they did last autumn, to dump BL and forget it. We should reject calls to hive off and privatise the profitable operations. If the Secretary of State goes on saying that he wishes to encourage the privatisation of everything, I shall forgive him so long as he does not actually do it. If he wants a British car industry he will not do it.
Thirdly, we must recognise that results are beginning to emerge at BL. Here I thought that the two sides came together a little at one point, although I thought that the Secretary of State was a shade ungracious in referring to the Metro figures, as Metro production is ahead of BL's own forecasts. He might at least have given credit for that. I take it that that was simply a mistake on his part. We must also maintain support for new product development, because the future of any motor car industry in the world lies in new product development.
Finally, if we are to do things in style we must tell the EEC Commission "Hands off'—I had better not use a stronger phrase—because we must not allow the EEC to interfere at this time with the revival and regeneration of our motor car industry, and it is in grave danger of doing so.
I saw an answer from the Under-Secretary of State about a week ago on this very point. We should not allow the European Commission to prevent our investing as much as we need to in BL. If the Commission objects, we should point out that we have splendid precedents just


across the Channel, even in the days of President Giscard D'Estaing, for a Government saying frankly that they do not agree and intend to do what is best for themselves.
Those are the steps that we should take immediately. The right hon. Gentleman may rightly ask, however, what a Labour Government would do. I take the point and I shall answer it as best as I can.
First, a Labour Government would deal with the motor vehicle industry as a growth sector. Here I found myself strangely in agreement, for the first time in about nine years, with the hon. Member for Bromsgrove and Redditch. He was really saying that he wanted the motor car industry treated as a sector, but he does not really give a damn about any other part. Nevertheless, he is right to say that it should be treated as a sector. We should make it a growth sector in our industry, as it has an interlinking effect on so many other industries—on steel, on coal and on every other major industry—and its effect on the components industry is enormous.
Secondly, if we are to revive the motor vehicle industry as an engine of growth we must boost home demand. We must steer it into domestic production by controlling imports of motor vehicles, including imports from the EEC. We should be prepared to do that, and we should give a warning that we intend to do it now.
Finally, as my right hon. Friend pointed out in what I thought was the kernel of his argument, we need to channel public funds into investment in a whole new range of product development. Many hon. Members rightly spoke of using public funds in research. I agree, but we should not be afraid of larger investment either. While we are thinking in terms of research and development, however, as of course is right, we should also never be afraid to learn from others. I have often advocated from this Dispatch Box—and, indeed, from the other when I was Minister of Agriculture, Fisheries and Food—that we should not be afraid to learn from the French. We should also learn from the Japanese.
In the Department of Industry there should be a division of information technology of a slightly different form from the one on which the Minister of State is rightly so keen. That division should do what the Japanese did, and go to every patent office in the developed world. At the end of the war the Japanese did not have the money or the time to develop their own research, so they looked at what everyone else had done and developed variants of it.
That is one way in which we can reduce the time lag, otherwise we are faced with the gloomy prophesy of the hon. Member for Aldridge-Brownhills that we will never catch up with the Japanese.
This has been an interesting and important debate. I hope that my right hon. and hon. Friends will join me in the Lobby tonight.

The Minister of State, Department of Industry (Mr. Norman Tebbit): One message that must certainly go out from this House is a caution to Japan. Had the Japanese been listening to the debate they would have heard many expressions of good will and understanding of the success that has come to Japan through hard work, efficiency, technical advance and all the things that we should have in Britain.
However, we must also warn them that when our trade is affected, not across the board over a large number of products but in respect of a narrow range of products, it can be dangerous not only to our industries but to the industries of other countries that are affected.
I want no part of import controls, but we expect Japan to maintain an understanding of the perils for world trade that could be caused if their activities are as disruptive as they could possibly become. That is common ground throughout the House. It is, therefore, all the more effective if that message is known.
It is pleasant to welcome the right hon. Member for Deptford (Mr. Silkin) back from his exile, wherever it has been. I believe that he has been fighting an election somewhere. The right hon. Gentleman spoke about marginal seats at the beginning of his speech, and I think that he must be after one. He is right to come here to conduct his campaign in the House of Commons. It is much cheaper to advertise here than in Tribune or Labour Weekly, and no one will question his election expenses.
I enjoyed the right hon. Gentleman's passing swipe at the Social Democrats and his old colleague, Mrs. Shirley Williams, with whom he shared so many election platforms, who sat in Cabinet with him and the right hon. Member for Bristol, South-East (Mr. Benn), and who deserted him only when she found that she had backed a loser. I was also taken with his remark that it takes two to make a quarrel. It certainly does. I notice that some of the right hon. Gentleman's colleagues have said that recently.
The right hon. Gentleman made a passing reference to productivity, as though it were a little problem that the motor industry had experienced in the past. In his view, it was not the big problem. Good gracious me, no; it was just a throw-away line. But it is not the Government who are now inventing these stories about the problem of productivity.
The right hon. Gentleman should look again at the CPRS report on the British motor industry, published in 1975, to see what it then said about the problems facing the industry. There was more than a passing reference to productivity there. Chapter III, paragraph 37, on page 79, stated:
Productivity (i.e. output per man) in British car assembly plants is considerably lower than in continental plants. It takes almost twice as many man-hours to assemble similar cars using the same or comparable plant and equipment in Britain as it does on the continent".
But all we had today was the right hon. Gentleman's passing reference to a little triviality.
Page 91, paragraph 51 (iii) continues:
Poor labour productivity and production losses in the British car industry also increase the cost of capital for each car produced.
That is the problem about investment. We had to invest more than any of our rivals to get the same amount of production. There was a shortage not of investment but of productivity.
Page 120, chapter IV, paragraph 34 (III) states:
Productivity will not improve unless there is a willingness to accept new manning levels and work practices.
Page 121, chapter IV, paragraph 36 continues:
Indeed, many of the problems besetting Chrysler and Vauxhall in Britain can be traced to their decisions to expand capacity at Linwood and Ellesmere Port in the mid-1960s on the basis of a false expectation that the United Kingdom car market would continue to expand at the then current rates of growth.
That covers many of the points raised in the debate.
Those are the problems. I am sorry that the right hon. Member for Deptford did not address himself to them. The British Motor Corporation, under the then Sir Donald Stokes—said the right hon. Gentleman—was too weak to cope with entry into the Common Market. The company was unable to cope with the French or Italians. It was not only Leyland that could not cope with the Italians or the French. Ford, Chrysler, Rootes and General Motors, Vauxhall were all in the same position. Therefore it was not just a question of what was happening in one firm.
The right hon. Gentleman said that for some reason—and productivity was a trifling one—we could not cope with competition. What is the right hon. Gentleman's recipe? He wants us to put back the barriers so that we need not try to cope. That is his only remedy. He wants us to build a wall round Britain and to pretend that the world is not there. In that way, we do not need to become as good as the others. The right hon. Gentleman wants import controls and nothing else. I accept that he wishes the industry to become a growth industry. However, that is to be done inside tariff walls. Who will accept our exports if we will not let imports into our markets?

Mr. John Silkin: rose——

Mr. Tebbit: The right hon. Gentleman did not give way to me, but I shall be more courteaus.

Mr. Silkin: The hon. Gentleman asked me a question. He looked straight at me and I assumed that he wanted me to answer. The answer is that Spain, for example, will not import our whisky, gin or anything else. Nevertheless it sends Fiestas to Britain.

Mr. Tebbit: I notice that the right hon. Gentleman is particularly upset about Spain. Certainly, Spain's tariff wall is outrageous. However, on Spain's accession to the Community it will come down. The right hon. Gentleman made a bigger fuss about Spain's 5 per cent. import penetration than about Japan's 10 per cent. import penetration. It would seem that the Japanese are playing the game and that it is only the nasty Europeans and their competition that the right hon. Gentleman does not like. That is a new twist.
The right hon. Gentleman said that the car industry should become a growth industry. He said that we should boost home demand by controlling imports. He would like to cut us off from the rest of the world. He thinks that if we hide it will be all right. How did we become uncompetitive? We lurked away from the competition.
The right hon. Gentleman wanted all sorts of things to receive public funds. I almost forgot that he had another recipe. He thought that we should go grubbing round the world looking at other people's patents. That was his lot. Mind you, Mr. Speaker, it was a lot more than the right hon. Member for Salford, West (Mr. Orme) had to offer. He did not even ask why our industry had become uncompetitive. He said that he wanted public expenditure to expand output. But what did he and his Government do when they had the chance to use public expenditure to expand output? I shall remind him. In 1974 the production of motor cars in Britain amounted to 1,534,000 units. They really whacked it on. They really steamed it in. They put in public purchasing. They did it all and they got demand up to 1,223,000 units. In the period 1974–78 production fell by 20 per cent. What were the then Government doing? Were they not boosting demand

enough? Were they not making enough public investment available? Or would Labour put in twice as much next time and achieve a fall of 40 per cent?
The figures that I shall now quote are not directly comparable. I warn hon. Members now, because I want to play fair. Let us consider what was happening to employment in the United Kingdom car industry at the same time. In 1974, about 497,000 people were employed in the industry. In 1978 there were 477,000—a fall of 4 per cent.
Now we know what caused unemployment in the last two years. There was a fall of 20 per cent. in output in the Labour Government's time and a fall of 4 per cent. in manning. The industry was uncompetitive before 'we started. The motor industry was grossly overmanned as we came into office. That shows us much of the problem.

Mr. Norman Buchan: The Minister is talking rubbish.

Mr. Tebbit: It is no good the hon. Gentleman rabbiting on like that just because he cannot stand the statistics.

Mr. Buchan: Will the hon. Gentleman give way?

Mr. Tebbit: No, I shall not. I am not going to let the hon. Member for Renfrewshire, West (Mr. Buchan) into the debate.

Mr. Buchan: The Minister must give way.

Mr. Speaker: Order. It is clear that the Minister is not giving way.

Mr. Tebbit: In no circumstances will I give way to the hon. Gentleman.

Mr. Buchan: Give way.

Mr. Speaker: Order. We have had an orderly debate. I hope that it will continue so.

Mr. Tebbit: It is not my custom to refuse interventions, but the hon. Member for Renfrewshire, West has not been here all day and I refuse to give way to him.

Mr. Stoddart: Will the Minister give way?

Mr. Tebbit: Of course.

Mr. Stoddart: I am obliged to the Minister. He has quoted statistics for the car industry during the period of the last Labour Government. Exactly what was he doing during that period? Was he not voting against aid for British Leyland?

Mr. Tebbit: I must confess that I voted against the Second Reading of the British Leyland Bill with Liberal Members, and for similar reasons. I took the opportunity to read the record of that debate today. Everything that was said from the then Opposition Benches has proved to be true. There is no need to take back a word.
Which hon. Member accused me of stabbing Leyland in the back?

Mr. Stoddart: I did.

Mr. Tebbit: Stabbed in the back? I stabbed it in the back with a cheque book. If I have made an incision into its fair body it is to slide in the tube to carry the financial blood transfusion. If I have made any error it is that I have been too kind and generous to Leyland. However, in many ways that has been repaid in recent times. There has been


a considerable turn round in the last couple of years. That applies not only to British Leyland. It applies to Talbot—but not to Linwood, unhappily.
Mr. Geoff Whalen, the personnel director of Talbot, says:
I don't think people yet realise the extent to which the often-stereotyped image of the militant and probably lazy British car-worker is a thing of the past.
There have been major changes in the last two years and they are represented by some of the things that have happened in Leyland—to which I shall refer again—and in other businesses. It is worth while to pick up one or two other threads in the debate. A common thread has gone through a number of speeches, but because of the lack of time some hon. Gentlemen and my hon. Friends will forgive me if I do not mention every person who spoke.
One of the threads was "Wouldn't it all be nice if it were not for the terribly high level of sterling? Why don't the Government do something about it?" I ask the hon. Member for Coventry, North-West (Mr. Robinson), what were we doing when the pound was $2·80 or $2·40? Why have we lost the competitiveness that allowed many firms to export in those days? Was life that much better when the pound was at $1·60? I see that sterling today is at $1·90 and deutschemark parity is below DM4·60. Shall we now have everyone rushing forward saying that all will be well, or shall we have a new series of whines from the Opposition? Let them remember that we have a trade surplus on sterling. That implies an upward pressure on our currency.
I do not think that we can bring our currency to a level which we think suits us. We cannot. I doubt whether Mr. Mitterrand wanted to devalue the franc when he was elected President of France, but that happened. I imagine that President Reagan wanted to strengthen the dollar, but that put down sterling and I doubt whether we can reverse that progress against it.
The high level of sterling has been one of the factors over the past two years that has forced British industry to become more competitive than it ever has been. It has not forced Leyland out of business. It has forced it into a position where, for the first time, it is becoming competitive.
Another thread in the debate came from those who questioned regional policy and the effects of pushing industry where it did not want to go. There is no lack of sympathy in the House for the problems of the regions, but there is a question mark over how effective the aid has been, first, in helping the regions and, secondly, in its effect on the rest of the country. My hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) interestingly questioned whether the policy should be sectoral rather than geographical.
Protection was another theme. I remind the right hon. Gentleman—he must know it—that we export 29 per cent. of our gross domestic product as against Japan's 12 per cent. Of all the countries with an interest in maintaining the GATT agreement we must have the strongest. We must remember that there are other countries with which we have heavy imbalances of trade, but the imbalance is in our favour. We do not want to set those countries off on the path of putting up tariff barriers against us.
The hon. Member for Coventry, North-West also spoke about the problems of the multinationals. He said there

was no way of getting rid of them. Why does he think that they are a problem? Why should he discuss whether there is a way of getting rid of them? Surely we should welcome them. He betrayed his inner thoughts by his casual use of words.
My hon. Friend the Member for Liverpool, Garston (Mr. Thornton) gave a clear and realistic view of the tragedy of the history of some of the motor industry on Merseyside. He was correct to regret Leyland's failure at Speke and he was correct to be more hopeful for Halewood. I should tell him and others who use the expression "mindless militants" that those militants are not mindless. Those who did the damage are clear-minded. They know what they want. They are the Trots with "Militant Tendency", the extreme Left, denounced as disruptive by the right hon. Members for Huyton (Sir H. Wilson), Cardiff, South-East (Mr Callaghan), Ebbw Vale (Mr. Foot) but never by the right hon. Member for Bristol, South-East. They are his allies.
My hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) was right in a lot of what he said. I am not nearly so pessimistic as my hon. Friend, and I do not believe that Japan can continue to widen the gap that she has over us. Sooner or later, either other countries will be forced to take action or there will be social changes inside Japan that will reduce her competitiveness.
The hon. Member for Liverpool, Edge Hill (Mr. Alton) dealt mainly with hire-purchase restrictions. I do not believe that we can relax those at present. It would have an effect on monetary aggregates and, most of all, at the moment we are not getting very good statistics about the path of monetary aggregates. Perhaps it will be easier to have a better discussion about this when we have those statistics again. However, I am aware of the problem, and I met representatives of the industry about it only a few days ago.
I am not sure whether I agree with the hon. Gentleman's 3:1 or 4:1 ratio of unemployment if BL were to close. I believe it to be much less than that. We have done what the hon. Gentleman asked us to do. We have put money into Leyland. But, as the hon. Gentleman said, import controls are insular, and we have to trade.
We are continuing investment in plant in industry across a very wide spectrum. But that investment should come primarily from profits, as I am sure the hon. Member for Edge Hill acknowledges, and those profits can come only from successful and productive industry.
My hon. Friend the Member for Rugby (Mr. Pawsey) was right to call for action in a number of areas and to ask about Government attitudes towards the motor industry. I agree especially with his emphasis on not using the industry as a regulator.
The hon. Member for Newport (Mr. Hughes) was a TGWU transport committee chairman and he worked as a trade unionist in the industry. If he blames only successive Governments for the long decline and does not think that anything was really wrong in the attitudes of workers, he is not living in the same world as I am.
According to the hon. Member for Birmingham, Stechford (Mr. Davis), everyone in the industry was perfect except the Government. I understand that the hon. Gentleman used to work for British Leyland. That is probably why he thinks that everyone there was perfect. He apparently thought that the only problem was high sterling.
As we come to the end of the debate it is worth mentioning some of the factors that are now going right in the industry. My hon. Friend the Member for Halesowen and Stourbridge (Mr. Stokes) put it very well, in my view. We have seen great changes in the industry. In recent months we have seen the first reduction in import share in the car market. We have seen the first increase in output of cars per man year in British Leyland. We have seen the first increase in British Leyland's share of the car market. We have seen wiser pay bargaining. We have seen improvements in industrial relations in British Leyland. Last year, 98·6 per cent. of the working hours were strike-free. This year, so far, the figure is 99 per cent. Is this the programme of confrontation which we were told before the election the Government would indulge in? We have seen the launch of new models. The Metro is a success already. We see the Acclaim coming in October. Linwood could have taken part in this if it had got it right five years ago. We have the LC10 coming soon.
Things are happening in the industry on time, on cost and on quality. As I have said already, it is not just in BL. It is also happening in Talbot, which is why that company is getting the investment at Ryton. All these things could have been done five years ago, and should have been.
Today, we have had a well-intentioned but vacuous attack from the Opposition, and we have to emphasise again the last line of the Government's proposed amendment to the motion. It is the customer that matters. It is satisfying the customer with the right product on time, on price and on quality that matters. That is why we reject the Opposition's vacuous attack upon the Government.

Question put, That the original words stand part of the Question: ——

The House divided: Ayes 225, Noes 317.

Division No. 241]
[10.00 pm


AYES


Abse, Leo
Cowans, Harry


Adams, Allen
Craigen, J. M.


Allaun, Frank
Cryer, Bob


Anderson, Donald
Cunliffe, Lawrence


Archer, Rt Hon Peter
Cunningham, Dr J. (W'h'n)


Ashley, Rt Hon Jack
Dalyell, Tam


Ashton, Joe
Davidson, Arthur


Atkinson, N. (H'gey,)
Davies, Rt Hon Denzil (L'lli)


Bagier, Gordon AT.
Davies, Ifor (Gower)


Barnett, Guy (Greenwich)
Davis, Clinton (Hackney C)


Barnett, Rt Hon Joel (H'wd)
Davis, T. (B'ham, Stechf'd)


Bennett, Andrew (St'kp't N)
Deakins, Eric


Bidwell, Sydney
Dean, Joseph (Leeds West)


Booth, Rt Hon Albert
Dempsey, James


Boothroyd, Miss Betty
Dewar, Donald


Bottomley, Rt Hon A. (M'b'ro)
Dixon, Donald


Bray, Dr Jeremy
Dobson, Frank


Brown, Hugh D. (Provan)
Dormand, Jack


Brown, R. C. (N'castle W)
Douglas, Dick


Brown, Ron (E'burgh, Leith)
Dubs, Alfred


Brown, Ronald W. (H'ckn'y S)
Duffy, A. E. P.


Buchan, Norman
Dunn, James A.


Callaghan, Rt Hon J.
Dunnett, Jack


Callaghan, Jim (Midd't'n &amp; P)
Dunwoody, Hon Mrs G.


Campbell, Ian
Eadie, Alex


Campbell-Savours, Dale
Eastham, Ken


Canavan, Dennis
Ellis, R. (NE D'bysh're)


Cant, R. B.
English, Michael


Carmichael, Neil
Ennals, Rt Hon David


Carter-Jones, Lewis
Evans, loan (Aberdare)


Clark, Dr David (S Shields)
Ewing, Harry


Cocks, Rt Hon M. (B'stol S)
Faulds, Andrew


Coleman, Donald
Field, Frank


Concannon, Rt Hon J. D.
Fitch, Alan


Conlan, Bernard
Flannery, Martin


Cook, Robin F.
Fletcher, Raymond (Ilkeston)





Fletcher, Ted (Darlington)
Ogden, Eric


Foot, Rt Hon Michael
O'Halloran, Michael


Ford, Ben
O'Neill, Martin


Forrester, John
Orme, Rt Hon Stanley


Foulkes, George
Palmer, Arthur


Fraser, J. (Lamb'th, N'w'd)
Park, George


Freeson, Rt Hon Reginald
Parker, John


Garrett, John (Norwich S)
Pendry, Tom


Garrett, W. E. (Wallsend)
Powell, Raymond (Ogmore)


George, Bruce
Prescott, John


Gilbert, Rt Hon Dr John
Price, C. (Lewisham W)


Ginsburg, David
Race, Reg


Golding, John
Radice, Giles


Grant, George (Morpeth)
Rees, Rt Hon M (Leeds S)


Grant, John (Islington C)
Richardson, Jo


Hamilton, W. W. (C'tral Fife)
Roberts, Albert (Normanton)


Harrison, Rt Hon Walter
Roberts, Allan (Bootle)


Hattersley, Rt Hon Roy
Roberts, Ernest (Hackney N)


Healey, Rt Hon Denis
Roberts, Gwilym (Cannock)


Heffer, Eric S.
Robertson, George


Hogg, N. (E Dunb't'nshire)
Robinson, G. (Coventry NW)


Holland, S. (L'b'th, Vauxh'll)
Robinson, P. (Belfast E)


Home Robertson, John
Rooker, J. W.


Homewood, William
Rowlands, Ted


Hooley, Frank
Ryman, John


Huckfield, Les
Sever, John


Hudson Davies, Gwilym E.
Sheerman, Barry


Hughes, Mark (Durham)
Sheldon, Rt Hon R.


Hughes, Robert (Aberdeen N)
Shore, Rt Hon Peter


Hughes, Roy (Newport)
Short, Mrs Renée


Janner, Hon Greville
Silkin, Rt Hon J. (Deptford)


Jay, Rt Hon Douglas
Silkin, Rt Hon S. C. (Dulwich)


John, Brynmor
Silverman, Julius


Johnson, James (Hull West)
Skinner, Dennis


Johnson, Walter (Derby S)
Smith, Rt Hon J. (N Lanark)


Jones, Rt Hon Alec (Rh'dda)
Snape, Peter


Jones, Barry (East Flint)
Soley, Clive


Jones, Dan (Burnley)
Spearing, Nigel


Kaufman, Rt Hon Gerald
Spriggs, Leslie


Kilroy-Silk, Robert
Stallard, A. W.


Lamond, James
Stewart, Rt Hon D. (W Isles)


Leadbitter, Ted
Stoddart, David


Leighton, Ronald
Stott, Roger


Lewis, Ron (Carlisle)
Strang, Gavin


Litherland, Robert
Summerskill, Hon Dr Shirley


Lofthouse, Geoffrey
Taylor, Mrs Ann (Bolton W)


Lyon, Alexander (York)
Thomas, Dafydd (Merioneth)


Mabon, Rt Hon Dr J. Dickson
Thomas, Jeffrey (Abertillery)


McCartney, Hugh
Thomas, Dr R. (Carmarthen)


McDonald, Dr Oonagh
Thorne, Stan (Preston South)


McKay, Allen (Penistone)
Tilley, John


McKelvey, William
Tinn, James


MacKenzie, Rt Hon Gregor
Torney, Tom


McMahon, Andrew
Varley, Rt Hon Eric G.


McNamara, Kevin
Wainwright, E.(Dearne V)


McTaggart, Robert
Walker, Rt Hon H.(D'caster)


McWilliam, John
Watkins, David


Magee, Bryan
Weetch, Ken


Marks, Kenneth
Wellbeloved, James


Marshall, D (G'gow S'ton)
Welsh, Michael


Marshall, Dr Edmund (Goole)
White, J. (G'gow Pollok)


Marshall, Jim (Leicester S)
Whitehead, Phillip


Martin, M (G'gow S'burn)
Whitlock, William


Mason, Rt Hon Roy
Wigley, Dafydd


Maxton, John
Willey, Rt Hon Frederick


Maynard, Miss Joan
Williams, Rt Hon A. (S'sea W)


Meacher, Michael
Wilson, Gordon (Dundee E)


Mellish, Rt Hon Robert
Wilson, Rt Hon Sir H. (H'ton)


Millan, Rt Hon Bruce
Wilson, William (C'try SE)


Miller, Dr M. S. (E Kilbride)
Winnick, David


Mitchell, Austin (Grimsby)
Woodall, Alec


Mitchell, R. C. (Soton Itchen)
Woolmer, Kenneth


Morris, Rt Hon A. (W'shawe)
Wright, Sheila


Morris, Rt Hon C. (O'shaw)
Young, David (Bolton E)


Morris, Rt Hon J. (Aberavon)



Morton, George
Tellers for the Ayes:


Moyle, Rt Hon Roland
Mr. Frank Haynes and


Newens, Stanley
Mr. Frank R. White.


Oakes, Rt Hon Gordon







NOES


Adley, Robert
Eyre, Reginald


Aitken, Jonathan
Fairbairn, Nicholas


Alexander, Richard
Fairgrieve, Russell


Alison, Michael
Faith, Mrs Sheila


Alton, David
Farr, John


Amery, Rt Hon Julian
Fell, Anthony


Ancram, Michael
Fenner, Mrs Peggy


Arnold, Tom
Finsberg, Geoffrey


Aspinwall, Jack
Fisher, Sir Nigel


Atkins, Rt Hon H. (S'thorne)
Fletcher, A. (Ed'nb'gh N)


Atkins, Robert (Preston N)
Fletcher-Cooke, Sir Charles


Baker, Kenneth (St.M'bone)
Fookes, Miss Janet


Baker, Nicholas (N Dorset)
Forman, Nigel


Banks, Robert
Fowler, Rt Hon Norman


Beaumont-Dark, Anthony
Fox, Marcus


Beith, A. J.
Fraser, Rt Hon Sir Hugh


Bendall, Vivian
Fraser, Peter (South Angus)


Benyon, Thomas (A'don)
Fry, Peter


Benyon, W. (Buckingham)
Galbraith, Hon T. G. D.


Best, Keith
Gardiner, George (Reigate)


Bevan, David Gilroy
Gardner, Edward (S Fylde)


Biffen, Rt Hon John
Garel-Jones, Tristan


Biggs-Davison, John
Gilmour, Rt Hon Sir Ian


Blackburn, John
Glyn, Dr Alan


Blaker, Peter
Goodhart, Philip


Body, Richard
Goodhew, Victor


Bonsor, Sir Nicholas
Goodlad, Alastair


Boscawen, Hon Robert
Gorst, John


Bottomley, Peter (W'wich W)
Gow, Ian


Bowden, Andrew
Gower, Sir Raymond


Boyson, Dr Rhodes
Gray, Hamish


Braine, Sir Bernard
Greenway, Harry


Bright, Graham
Griffiths, E. (B'y St. Edm'ds)


Brinton, Tim
Griffiths, Peter Portsm'th N)


Brittan, Leon
Grist, Ian


Brooke, Hon Peter
Grylls, Michael


Brotherton, Michael
Gummer, John Selwyn


Brown, Michael (Brigg &amp; Sc'n)
Hamilton, Hon A.


Browne, John (Winchester)
Hamilton, Michael (Salisbury)


Bruce-Gardyne, John
Hampson, Dr Keith


Bryan, Sir Paul
Hannam, John


Buchanan-Smith, Alick
Haselhurst, Alan


Buck, Antony
Hastings, Stephen


Budgen, Nick
Havers, Rt Hon Sir Michael


Bulmer, Esmond
Hawksley, Warren


Butcher, John
Hayhoe, Barney


Cadbury, Jocelyn
Heath, Rt Hon Edward


Carlisle, John (Luton West)
Heddle, John


Carlisle, Kenneth (Lincoln)
Henderson, Barry


Chalker, Mrs. Lynda
Heseltine, Rt Hon Michael


Channon, Rt. Hon. Paul
Hicks, Robert


Chapman, Sydney
Higgins, Rt Hon Terence L.


Churchill, W. S.
Hogg, Hon Douglas (Gr'th'm)


Clark, Hon A. (Plym'th, S'n)
Holland, Philip (Carlton)


Clark, Sir W. (Croydon S)
Hooson, Tom


Clarke, Kenneth (Rushcliffe)
Hordern, Peter


Clegg, Sir Walter
Howell, Rt Hon D. (G'ldf'd)


Colvin, Michael
Howell, Ralph (N Norfolk)


Cope, John
Hunt, David (Wirral)


Cormack, Patrick
Hunt, John (Ravensbourne)


Corrie, John
Hurd, Hon Douglas


Costain, Sir Albert
Irving, Charles (Cheltenham)


Cranborne, Viscount
Jenkin, Rt Hon Patrick


Critchley, Julian
Johnson Smith, Geoffrey


Crouch, David
Johnston, Russell (Inverness)


Dean, Paul (North Somerset)
Jopling, Rt Hon Michael


Dickens, Geoffrey
Joseph, Rt Hon Sir Keith


Dorrell, Stephen
Kellett-Bowman, Mrs Elaine


Douglas-Hamilton, Lord J.
Kershaw, Anthony


Dover, Denshore
Kimball, Marcus


du Cann, Rt Hon Edward
King, Rt Hon Tom


Dunlop, John
Knight, Mrs Jill


Dunn, Robert (Dartford)
Knox, David


Durant, Tony
Lamont, Norman


Dykes, Hugh
Lang, Ian


Eden, Rt Hon Sir John
Langford-Holt, Sir John


Edwards, Rt Hon N. (P'broke)
Latham, Michael


Eggar, Tim
Lawrence, Ivan


Elliott, Sir William
Lawson, Rt Hon Nigel





Lennox-Boyd, Hon Mark
Rhodes James, Robert


Lester, Jim (Beeston)
Rhys Williams, Sir Brandon


Lewis, Kenneth (Rutland)
Ridley, Hon Nicholas


Lloyd, Ian (Havant &amp; W'loo)
Ridsdale, Sir Julian


Lloyd, Peter (Fareham)
Rifkind, Malcolm


Loveridge, John
Rippon, Rt Hon Geoffrey


Luce, Richard
Roberts, M. (Cardiff NW)


Lyell, Nicholas
Roberts, Wyn (Conway)


McCrindle, Robert
Rossi, Hugh


Macfarlane, Neil
Rost, Peter


MacKay, John (Argyll)
Royle, Sir Anthony


Macmillan, Rt Hon M.
Sainsbury, Hon Timothy


McNair-Wilson, M. (N'bury)
St. John-Stevas, Rt Hon N.


McNair-Wilson, P. (New F'st)
Scott, Nicholas


McQuarrie, Albert
Shaw, Giles (Pudsey)


Madel, David
Shaw, Michael (Scarborough)


Major, John
Shelton, William (Streatham)


Marland, Paul
Shepherd, Colin (Hereford)


Marlow, Tony
Shepherd, Richard


Marshall, Michael (Arundel)
Shersby, Michael


Marten, Neil (Banbury)
Silvester, Fred


Mates, Michael
Sims, Roger


Mather, Carol
Skeet, T. H. H.


Maude, Rt Hon Sir Angus
Speed, Keith


Mawby, Ray
Speller, Tony


Mawhinney, Dr Brian
Spence, John


Mayhew, Patrick
Spicer, Jim (West Dorset)


Mellor, David
Spicer, Michael (S Worcs)


Meyer, Sir Anthony
Sproat, Iain


Miller, Hal (B'grove)
Squire, Robin


Mills, Iain (Meriden)
Stanbrook, Ivor


Mills, Peter (West Devon)
Stanley, John


Miscampbell, Norman
Steel, Rt Hon David


Mitchell, David (Basingstoke)
Steen, Anthony


Moate, Roger
Stevens, Martin


Monro, Hector
Stewart, Ian (Hitchin)


Montgomery, Fergus
Stewart, A. (E Renfrewshire)


Moore, John
Stokes, John


Morgan, Geraint
Stradling Thomas, J.


Morris, M. (N'hampton S)
Tapsell, Peter


Morrison, Hon C. (Devizes)
Taylor, Teddy (S'end E)


Morrison, Hon P. (Chester)
Tebbit, Norman


Mudd, David
Temple-Morris, Peter


Murphy, Christopher
Thatcher, Rt Hon Mrs M.


Myles, David
Thomas, Rt Hon Peter


Neale, Gerrard
Thompson, Donald


Needham, Richard
Thorne, Neil (Ilford South)


Nelson, Anthony
Thornton, Malcolm


Neubert, Michael
Townend, John (Bridlington)


Newton, Tony
Townsend, Cyril D, (B'heath)


Normanton, Tom
Trippier, David


Nott, Rt Hon John
Trotter, Neville


Onslow, Cranley
van Straubenzee, Sir W.


Oppenheim, Rt Hon Mrs S.
Vaughan, Dr Gerard


Osborn, John
Viggers, Peter


Page, John (Harrow, West)
Waddington, David


Page, Rt Hon Sir G. (Crosby)
Wainwright, R. (Colne V)


Page, Richard (SW Herts)
Wakeham, John


Parris, Matthew
Waldegrave, Hon William


Patten, Christopher (Bath)
Walker, Rt Hon P. (W'cester)


Patten, John (Oxford)
Walker, B. (Perth)


Pattie, Geoffrey
Walker-Smith, Rt Hon Sir D.


Pawsey, James
Wall, Patrick


Penhaligon, David
Waller, Gary


Percival, Sir Ian
Walters, Dennis


Peyton, Rt Hon John
Ward, John


Pink, R. Bonner
Warren, Kenneth


Pollock, Alexander
Watson, John


Porter, Barry
Wells, John (Maidstone)


Prentice, Rt Hon Reg
Wells, Bowen


Price, Sir David (Eastleigh)
Wheeler, John


Prior, Rt Hon James
Whitelaw, Rt Hon William


Proctor, K. Harvey
Whitney, Raymond


Pym, Rt Hon Francis
Wickenden, Keith


Raison, Timothy
Wiggin, Jerry


Rathbone, Tim
Wilkinson, John


Rees, Peter (Dover and Deal)
Williams, D. (Montgomery)


Rees-Davies, W. R.
Winterton, Nicholas


Renton, Tim
Wolfson, Mark






Young, Sir George (Acton)
Mr. Spencer Le Marchant and



Mr. Anthony Berry.


Tellers for the Noes:

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 32 (Questions on amendments), and agreed to.

MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,

That this House supports the Government's economic and industrial policy; regrets the British motor vehicle industry's long decline in competitiveness which reflects the past performance of managements and workforces as well as the interventions of previous Governments; notes that Her Majesty's Government have provided substantial funds to the industry at the expense of taxpayers and other sectors of industry and commerce; welcomes the industry's recent improvements in productivity, the investments in the United Kingdom by multinationals, and the voluntary restraint agreement with the Japanese; and believes that jobs and prosperity in the industry can only be assured if managements and workforces satisfy sufficient customers with the quality, price and design of the products.

London Docklands Development Corporation

The Minister for Local Government and Environmental Services (Mr. Tom King): I beg to move,
That the London Docklands Development Corporation (Area and Constitution) Order 1980, a copy of which was laid before this House on 27 November, be approved.

Mr. Speaker: With this it will be convenient to take the remaining three orders relating to London Docklands.

Mr. King: This order marks the end of a long parliamentary procedure. As long ago as September 1979 my right hon. Friend the Secretary of State announced our proposals for urban development corporations for London Docklands and for Liverpool, Merseyside. Following that announcement we issued a consultation paper in October. Following the consultation and discussions that ensued, those proposals were incorporated in the Local Government, Planning and Land Bill, which, as a number of hon. Members will remember with fond affection, exercised the House between February and November 1980.
Therefore, I do not believe that anyone can pretend that the proceedings before the House come as a great surprise; rather, they come as the result of a long parliamentary procedure. That procedure was further extended because the order for the London Docklands Development Corporation was laid on 27 November last year for both London and Merseyside. It was determined in another place that both orders were hybrid. They were therefore open to the hybrid procedure and to petitions against them. Ten petitions were received against the London Docklands Development Corporation order. Therefore, a Select Committee was established in another place to scrutinise the order under the hybridity procedure. The Select Committee sat from 10 February to 13 May to scrutinise those petitions. The House will be aware that the Select Committee reported on 5 June unanimously in favour of the order.
The House may also be aware that earlier today, in another place, the order was approved. Tonight we reach the final stage in a long and proper parliamentary procedure, which has been involved in the proposal to set up an urban development corporation.
The case that the Government have made throughout is that the scale and severity of the decline in Docklands required the type of solution involved in the urban development corporation approach. The scale of the reversal in Docklands is not just of local significance; it is of a national dimension. That argument was accepted by the Select Committee.
It is important to put this on record when the Government are asking the House to approve a new proposal for the arrangements in Docklands. I would not like to suggest at the start that nothing has been done in the past. It is appropriate to pay tribute to much of the work that has been done by the London boroughs, by the GLC and the Docklands Joint Committee. It would be appropriate to quote the view of the Select Committee, which said in its report:

despite the efforts of the DJC and the boroughs, new industry is not coming in to take the place of the old, and young people are still leaving the area. It is essential that something be done to arrest this decline … nothing will be done unless there is a change of approach—a change of priorities. Private investors will not put money into Docklands on any large scale unless they are encouraged by the presence of an environment attractive to them, including the availability of some private housing.
The Committee felt that the UDC would be more likely to attract private investment into the area than the boroughs and the DJC. It stressed the need for the UDC to establish and maintain good relations with the local authorities and their officers, to avail itself of their advice and expertise, and to win the confidence of the local organisations. The Committee concluded that the Government had made the case for the principle of an urban development area and an urban development corporation for London Docklands, and accordingly recommended unanimously.
It is that case that the Government have sought persistently to put before the House and before the Select Committee, and that I put before the House tonight for final confirmation.
The Select Committee accepted the Government's case, with one exception—that the Royal Mint site should be excluded from the urban development area. I say straight away—the House will be aware of this from the amendment order that we have before us tonight—that we have accepted the exclusion of the Royal Mint. We accept that the Royal Mint is not part and never has been part of the Docklands area, but we have always felt that it is part of what one might call the main gateway to the Docklands, and we attach the greatest importance, for the closest coordination of planning, to recognising the relationship between the Royal Mint site and the urban development corporation.
The area constitution order covers powers under sections 134 and 135 of the Local Government, Planning and Land Act 1980, and we do not propose any exclusions from this. But section 153 of the Act provides that the Secretary of State may make an order to give an urban development corporation the powers of a housing authority. It is not the present intention of the Government to make such an order, but even in the absence of such an order the corporation can use its general powers under the present order to carry out certain housing functions, particularly to increase the availability of housing in the private sector and through housing associations.
The Government, however, intend to make an order under section 149 of the Act to give the corporation the full range of planning authority powers, principally those of development control, which the Act permits. That order, together with a special development order under section 148(2), will be laid after the corporation has been set up, and both will be subject to negative resolutions.
Although it is intended that the development corporation should secure the regeneration of Docklands by engaging the energies and resources of the private sector at the outset, the corporation may have to undertake some commercial industrial and housing development of its own account. This, we believe, should be necessary only in the early years, and hence we intend to limit the development corporation's ability to undertake such a venture to the first three years of its life.
For 1981–82 we have allocated £65 million for expenditure by the development corporation, but more


resources are available, if necessary, to cover the costs of acquiring land from the Port of London Authority, the British Gas Corporation and other statutory undertakers.
These funds are in addition to other resources that the Government have made available for the area, for example, through the urban programme or for transport expenditure. A £100 million package for local road and public transport improvements over the next 15 years was agreed with the Greater London Council last year. Decisions have yet to be made for future years, but the Government attach high priority to the work of the development corporation and this will reflect in the resources provided in future years. Much of the expenditure in the first year will be for land acquisition and reclamation work, but resources will also be available for environmental improvement schemes, expenditure on roads and transport, and grants and loans under the Inner Urban Areas Act
My right hon. Friend has already announced his intention to appoint Mr. Nigel Broackes as chairman of the corporation and the right hon. Member for Bermondsey (Mr. Mellish) as deputy chairman. The purpose of these appointments, on a shadow basis, was to enable progress to be made while the normal procedures were in train and thereby to avoid any hiatus in the development of Docklands to which hon. Members, including the hon. Member for Greenwich (Mr. Barnett), have drawn my attention in the past. We have been anxious to avoid that. I believe that those appointments have been particularly valuable in ensuring that every possible progress was made, albeit under the necessity of the shadow situation that has existed.
If Parliament approves the order tonight the Secretary of State proposes to confirm the appointments and he will make additional board appointments. The Act allows for up to 13 members, and the Secretary of State will consult local authorities about the possible appointment of people
having special knowledge of the locality
in the words of the Act. The corporation will have a small staff and will buy in expertise wherever possible. It will work with, and use the services of, local authorities rather than attempt to duplicate them. The chief executive has already been appointed, also on a shadow basis. A nucleus of staff, recruited on a contingent basis, has been at work for some months. The costs have been borne by the Department of the Environment, as announced by my right hon. Friend in February last year.
The shadow development corporation recognises the progress that has been made by the Dockland Joint Committee and intends to build on that. It will take the strategic plan as its starting point. It does not intend to produce a new strategic plan for Docklands. It will, however, make informal plans for part of its area and will be producing planning briefs for particular development sites.

Mr. Nigel Spearing: It will perhaps save time if I put this question now. The right hon. Gentleman talks about maintaining the strategic plan but introducing informal plans. Will he be more specific? Will those informal plans be subject to the consultation procedure which, in another place, as we heard, the boroughs do not necessarily have to agree before it is imposed on them by the UDC or by the Secretary of State?

Mr. King: I sought to make it clear that the success of Docklands and of the development corporation will be

determined not by the ability to impose plans produced behind closed doors on an unwilling local population but by the ability to get the enthusiastic support of people in the area. I know that it is the determination of the shadow members—the deputy chairman is not all that far from the hon. Gentleman, if he cares to check the point——

Mr. Spearing: Further than might be thought.

Mr. King: ——to establish the closest understanding and consultation on all these issues. I personally attach the greatest importance to that. I am aware that the shadow members, who we hope will shortly be confirmed in their appointments, also attach the greatest importance to the closest consultation with the boroughs and with those living in the area.

Mr. Robert Mellish: It is people with terribly suspicious minds who utter these grave doubts. It would be stupid if the development corporation did not first discuss with the boroughs and officers concerned the plans that it has in mind, so that good will is established from the beginning. It is mischievous to assume that nothing like that will happen and that there will merely be skulduggery all the way down the line, which makes some of us a little sick.

Mr. King: First, I know the right hon. Gentleman's commitment to the success of this operation and something of his views about the need for the closest consultation in this area.
Subject to the will of the House, this is the last stage in this procedure. I understand why certain people have until now felt it necessary to maintain their opposition on points of principle, which I respect. Arguments about democratic representation on these issues have been much discussed in the House. But if tonight the House gives its approval I hope that people will no longer seek to pursue particular partisan arguments but will combine to try to make this a success. In the end, this is a proposal not for the benefit of Members of the House or for individuals but genuinely to help improve the situation for a large number of people living in Docklands. I very much hope that we can all work together to achieve that. Whether or not we would originally have chosen this line of approach, it having been decided I hope that everybody will work together towards its success.
We shall certainly look towards the corporation's new approach for a much greater emphasis on private housing and housing associations in the area. There will be a much more positive approach to securing the release of unused or under-used public sector land, of which Docklands has more than its fair share.
We shall certainly seek to ensure that the emphasis on employment is maintained, but the development corporation will be looking for a more varied range of activities—service industries and commerce as well—and not necessarily insisting on the traditional manufacturing industries of the area. The Docklands area has real strengths—the river and the open water, the many and varied industrial firms in the area, its obvious proximity to the City of London and the tremendous opportunity that it also offers for imaginative first-class architecture and developments in the very heart of the City. I need hardly say that my right hon. Friend attaches the greatest importance to that.
As I said, the shadow corporation shares with the Government and the Select Committee the view that in


order to succeed the corporation will have to work very closely with the local authorities and the local communities. I say again to the hon. Member, who has sustained his opposition so far, that he will understand that it cannot succeed unless it enlists the support and enthusiasm of local communities, and that it will be most anxious to achieve that in a completely genuine way. It is interesting that of all the witnesses who, in another place supported the petitions against the setting up of the development corporation, not one said that if it was finally approved he would not co-operate and work with it. I pay tribute tonight to the considerable co-operation that has already taken place with the local authorities through the Docklands Joint Committee in spite of their concerns and opposition to the proposals.
A key component in the strategy for the development corporation is to bring into use unused or under-used land. One of the handicaps to the development of the area has been the lack of suitably sized and serviced sites ready for development. Many of the sites that are at present unused, most of which are in public ownership, need a considerable amount of work to make them suitable for development. A number of them suffer from pollution problems. On some, the ground is unstable. Others lack access roads, or lack the basic infrastructure, or, in many cases, the services are pretty worn out. All those problems have to be tackled.
The Local Government, Planning and Land Act 1980 enables UDCs to acquire land compulsorily, in the case of publicly owned land by means of a vesting order subject to affirmative resolution of both Houses. That, of course, is the subject of two of the orders before us tonight, in respect of the PLA and the GLC. The principal purpose of this is to enable the development corporation at the outset to have enough land for its own projects and to prepare sites for private development.
During the shadow period, the development corporation has been discussing likely demand for land with the present owners, transport and planning authorities, financial institutions and private sector agencies, such as the volume house builders. The corporation has put forward proposals for the early acquisition of 840 acres of publicly owned land, which includes 280 acres belonging to the PLA and about 15 acres belonging to the GLC.
Further orders have been laid affecting 142 acres of land belonging to Southwark and 87 acres belonging to the borough of Newham. Once the details of the sites have been settled, orders will also be laid affecting land belonging to Tower Hamlets, and further land owned by the GLC. These later orders will come before us on another occasion and are not the subject of our business tonight. The development corporation is also negotiating the purchase of land from the British Gas Corporation, the CEGB and British Rail.
The major part of the PLA land lies in the Isle of Dogs. That follows the decision by the PLA last year to close its general cargo handling operations in the West India and Millwall docks. The land proposed for vesting is surplus to its operational requirements.
With the proposed designation of an enterprise zone in the Isle of Dogs, the land offers a major opportunity for industrial and commercial development. If it is vested in the development corporation the corporation will be able

to co-ordinate the provision of infrastructures and services, and generally manage the area to ensure that sites are speedily made available for the new activities.
As the hon. Member for Newham, South (Mr. Spearing) knows, the remainder of the PLA land lies in Newham and is intended for housing and community uses. Considerable interest has already been shown in the latter sites by the volume house builders.
The GLC land consists mainly of small sites intended by the corporation for a variety of uses, including private and mixed tenure housing in particular.
These orders were open to the usual procedure for hybrid instruments and could be petitioned against. No petitions were lodged against the GLC order. Two petitions were lodged against the PLA order, but they were withdrawn after the petitioners—in one case, the PLA itself and in the other, British Rail—were given assurances on some detailed points. Newham borough council petitioned against the inclusion of one site in the vesting order, but after considering the petition and representations made by the Department of the Environment, the hybrid instruments Committee concluded that it did not merit further inquiry by a Select Committee in view of the assurances given to the Committee and subsequently by the Department.
These orders represent the culmination in the parliamentary process to seek to bring a major new instrument to the aid of one of the most significant parts of the most important city of our land. Sadly, it is an area that has declined over the years. After many years of great prosperity, that decline has been of such a scale that the Government determined that the traditional instruments available were not adequate to meet the challenge presented.
They were anxious to see what resources could be brought to bear and what instrument could be devised to be the agent to implement those resources in order to reinvigorate and revive a major part of one of our great cities.
We believe that these proposals, and the procedures through which they have passed, have met the test. It is against a background of the most thorough examination that, in my recollection, any recent proposal has had in either House that I have the greatest of confidence in commending the orders to the House.

Mr. Gordon Oakes: I thank the Minister for having outlined the orders. I shall be brief in expressing from the Opposition Front Bench our opposition to the concept of the urban development corporation, and in particular to these vesting orders. I shall be brief because many of my right hon. and hon. Friends who represent Docklands constituencies wish to express their constituents' views. I hope that the Government will listen to them. As a result of the Secretary of State's implementation of direct rule over parts of dockland, those 50,000 people who live in the dockland area have only this opportunity to express their democratic opinions. Their councillors will not be able to speak for them. Only those hon. Members in the Chamber can express opinions about the future of their constituents.
That brings me to the heart of the case. These orders represent a denial of local democracy. My right hon. Friend the Member for Bermondsey (Mr. Mellish) knows that I hold him in high regard. During the Minister's


speech he intervened and said that people seemed to have terribly suspicious minds about the orders. We are terribly suspicious about anything that the Secretary of State does to local government. It is not only hon. Members who have suspicious minds but the whole of local government. I include in that the right hon. Gentleman's friends, who are county councillors and councillors. They are suspicious about anything that he wants to do.
The orders were opposed in the other place by the London boroughs of Newham, Southwark, and Tower Hamlets. They all petitioned the other place and were against the concept of the urban development corporation. In addition, many local trade organisations, trades councils and tenants' groups petitioned the other place. The newly elected GLC also petitioned the other place and has demonstrated its continued opposition to the concept in its brief, which was issued as recently as 30 June. That body was elected only this year, and its views are an expression of democratic opinion. The GLC opposes the whole concept of urban development corporations.
Paragraph 7.1 of the report of the Select Committee of the other place sums up our feelings in a nutshell. It states:
If a UDC is established, the power to control development in docklands will be transferred from the democratically elected borough councils to a body, the members of which are appointed by the Secretary of State. Only a very strong case could justify such a transfer of power and the Government have failed to make out such a case.
That is a summary of the petitioners' case against the order. It is also a summary of our case against these vesting orders.
To some extent, the other place may have been misled. There is constant reference to the fact that some sort of new town is being established in London. There is no parallel between setting up a new town and setting up an urban development corporation in Docklands. Invariably, a new town deals with a green field site. It does not deal with people. As I said, 50,000 people live in the area. Their families have lived there for generations. Instead of having democratically elected councillors to deal with their grievances and complaints and with the planning of their environment, the Secretary of State will appoint a body to take over that duty.
There are several planning objections. The House of Lords' Committee begins its conclusion with some wise words. It states:
Docklands does not form a single homogeneous community.
Of course it does not. The areas are parts of London boroughs. The vesting orders mean that undemocratic planning for parts of the borough and the GLC area will take place. That will have severe repercussions for other parts of the boroughs. They will have no control over what happens. Comprehensive planning will be impossible by a democratically elected council.

Mr. Sydney Chapman: Is the right hon. Gentleman saying that that applies to a national park planning board? Surely the same principle applies. For the so-called better good, or in the national interest, the planning boards have specific powers. One could argue that the local authorities in such areas do not enjoy the democratic rights that they should.

Mr. Oakes: When one is dealing with a national park, one is dealing mainly with fields and trees. We are dealing with an urban area where many people who are

accustomed to elected councillors live. That is the difference between a new town or national park and Docklands.
There will be planning repercussions for the rest of the boroughs. Duplication of effort will occur between UDC officials and the planning officials of the boroughs. I thought that the Government were against that. Roads and communications are examples. The Secretary of State is not paying attention. We are accustomed to his rudeness to the House. We experienced it yesterday.

The Secretary of State for the Environment (Mr. Michael Heseltine): I am sorry. I was consulting my right hon. Friend the Minister. I was asking whether he could think of a new town that was just green fields. Our experience is that new towns comprise green fields and a significant urban input.

Mr. Oakes: I admit that new towns do not consist entirely of green fields, but they are not tight, compact urban areas like our capital city. [Interruption.] The noise shows that Government Members do not realise that we are talking about 50,000 people who live in the area. My hon. Friends will seek to take part in the debate later, because they will have no other means of expressing their views to a body which they do not elect and over which they have no control.
Roads and communications affect other parts of the London boroughs and the Greater London Council. The GLC is concerned about roads and communications. Whatever the UDC does must have effects outside.

Mr. Anthony Steen: Why?

Mr. Oakes: That is a fatuous remark. [HON. MEMBERS: "Answer."] Of course I shall answer, but I should not have thought that the question needed an answer. When planning and developing an area one must be able to get to and from that area. That has its effects on the GLC and other elected bodies. Budgets will be involved in providing infrastructure to fit in with what the UDC does.
There are also financial objections. I understand that, initially, the Government will give about £65 million to the UDC. If the Government had given that to the DJC it could have done just as good a job, or even a better job, under democratic control.
The right hon. Gentleman will know, if he wants to pursue the new town analogy, that any new town will have revenue consequences for the capital expenditure on the rest of the borough concerned. That will apply here. That is something that the right hon. Gentleman has forgotten in his savage attack on county and district councils in his formula for the 1978–79 cutting back by 5½ per cent. on that expenditure. Any new town has revenue consequences that the county or district has to bear. My constituency bears testimony to that.
Do these orders suggest that much of the £65 million will be spent haphazardly on land acquisition? Will the result be that the urban development corporation will be able to pick the plum sites to sell to developers, without regard for the total planning of the area?
Have the Government made out a case for the orders? I am pleased that the Minister paid a tribute to what the DJC has done. The Select Committee report says:
The Committee were very favourably impressed by the high standard of ability displayed by the borough officers v, ho gave evidence before them. They were also impressed by the amount which has … been achieved by the DJC and the boroughs


despite the unfavourable economic climate. The Beckton marshes have been drained, Surrey Docks have been filled in and the London Dock in Wapping is in process of being filled in. Amenities of various kinds have been provided—such as an admirable Sports Centre at Wapping—and something has been done towards replacing 'dock-related' industry with other activities—such as the placing of the Billingsgate Market in the Isle of Dogs.
I admit, however, that the report goes on to say that
the amount which remains to be done is enormous".
The DJC knew that the amount remaining to be done was enormous, and it has achieved much, despite the unfavourable climate that the Government have created.
I am not a London Member, but this is a matter of importance to all of us, because we are dealing with the capital city. We do not want an area that will be a museum or consist only of institutions, banks or offices.

Mr. Steen: Why not?

Mr. Oakes: The hon. Gentleman asks "Why not?" I want my capital city to be inhabited by people who live and work there, and form part of the community, and not become merely an inland commuter belt. I want the area to form part of the cohesive whole that we knew as the East London area. I fear that the vesting orders will deny that kind of development. I shall listen with interest to what my right hon. and hon. Friends have to say, but I suspect that they share my fears about what will happen.

Mr. John Wheeler: I welcome the proposals of my right hon. Friend the Secretary of State to set up the urban development corporation in London's Docklands, not least for the overall effect that it will have on the nation's economy. The corporation will help to create jobs and attract the wealth-creating sector of our economy to an area that has long since seen better days.
The closure of docks, which started in the mid-1960s with the advent of containerisation, together with the disappearance of dock-related industry, has left London's dockland more or less like a graveyard. Despite efforts by the local authorities and the Docklands Joint Committee, new industry has not come in to replace the old industries.

Mr. Spearing: That is not true.

Mr. Wheeler: The Government have a duty to establish an environment in which private enterprise can flourish. That means good communications, roads, airports—

Mr. Spearing: Airports?

Mr. Wheeler: ——and adequate supplies of energy, so that British industry can compete on an equal footing with industry abroad. The area of London dockland is a prime example of the need for the Government to accept this responsibility.
Private investors will not put money into dockland on any large scale unless they are encouraged by an environment that is attractive to them, where they think that they can make their businesses pay.
As experience has shown, businesses will not just spring up in dockland if left merely to free market forces. The scale of the problem is too great, and radical action by the Government is required. With the powers given to them by the Local Government, Planning and Land Act 1980, especially the power to acquire and to resell land and

the power to provide essential services, the proposed urban development corporation will, 1 believe, sow the seeds for a flourishing business and residential community in London dockland.

Mr. Steen: Does my hon. Friend agree that previous Administrations have concentrated all the Government funds on a great deal of social and welfare work that has not created the revitalisation of the urban areas, and that this proposal is an imaginative and new one, to try to revitalise in an economic way derelict land that for decades has been empty? Does he agree that that is the distinction between this initiative and the programmes of previous Labour Adminsitrations?

Mr. Wheeler: I am grateful to my hon. Friend, because that is the purpose of this exercise. Right hon. and hon. Members, including some hon. Members on the Opposition Benches, are thinking of the needs of the people of London and of their future prosperity in this, our capital city.
My hon. Friend is right in the sense that the local borough councils are not equipped adequately to perform this role. Each borough, necessarily, is as much concerned for the parts of its area that lie outside dockland as for the parts that lie inside, and cannot possibly have a single-minded concern for the regeneration of dockland as a whole.

Mr. Steen: That is right.

Mr. Wheeler: Furthermore, the boroughs are unsuitable recipients for Government money that is designed to attract new types of industry and private housing, of which London is in desperate need.

Mr. Christopher Murphy: Does my hon. Friend agree that there is a tremendous imbalance in the East End of London between private housing and public sector housing, and that it is essential that we get far more private housing there, which is what we shall achieve by passing these orders?

Mr. Wheeler: I agree with my hon. Friend. Many of us who represent London constituences are aware of the number of constituents who come to see us in our advice bureaux seeking places in London where they may become home owners and part of the prosperity in the ownership of property in London.
The role of the UDC must be seen as no more than to clear the area to encourage private sector investment that alone will lead to the ultimate success of London dockland. The UDC is the prologue that sets the stage. It is the private sector that plays the leading part.
That is how Mr. Nigel Broackes, chairman designate of the Docklands UDC, sees his role. In a speech to the Royal Town Planning Institute on 7 May 1980, he said that the UDC would use Government money for infrastructure and a few developments on its own account, but that the great bulk of what had to take place depended on private sector investment and creating an atmosphere of long-term confidence to encourage this investment.
Inevitably, the Docklands project will require a substantial amount of Government investment. I understand that £65 million will be made available to the corporation in its first year—1981–82. I welcome that investment, because a far greater proportion of the nation's resources needs to be spent on the accumulation of capital and investing in the future. That applies in particular to the


public sector, where spending cuts all too often have been carved out of capital investment rather than wasteful consumption.
Since 1975 there has been a staggering decline in public sector capital projects, such as this London Dock- lands scheme. Fixed capital expenditure, at 1980 survey prices, amounted to about £16 million in 1975–176 and £10 million in 1980–81. As a percentage of total public expenditure, those sums represent 19·4 per cent. and 12·5 per cent. respectively. Of course, a clear distinction needs to be drawn between public current expenditure and public capital expenditure. The 1970s have shown us the follies of excessive current expenditure and it would be madness not to learn from that experience.
However, the expenditure on the Docklands is capital expenditure, and should be supported on the following grounds. First the investment does not involve a massive transfer of resources from the private to the public sector. The corporation will sell back to the private sector the land that it acquires, and I understand that its direct engagement in development will be limited to a period of three years. The main part of the expenditure—that is, not on land acquisition—will take the form of the corporation tendering contracts to private companies, and will indeed boost the private sector.
Secondly, the Government have a responsibility to provide an efficient economic environment where private enterprise can flourish. Experience has shown that business will not invest in London dockland unless some action is taken by the Government to make it worth its while.
Thirdly, the immediate effect of Government investment in Docklands will be to increase employment. The construction industry, to which a large part of the resources will be allocated, has spare capacity coming out of its ears. That capacity is in danger of being lost altogether, and a boost by the Government will put new life into London's half-dead construction industry. Unskilled labour, for example, will be taken up very quickly.
I realise that the investment will have to be set against the public sector borrowing requirement. It means more Government borrowing. That will be offset to a certain extent by the reduction in unemployment benefit and the additional tax revenue, but, more importantly, the investment proposed by the Government in Docklands will expand the nation's economy. It is an investment for the future, and must be supported on those grounds alone, not only for the good of London but for the good of our country.

Mr. Peter Shore: The orders setting up a development corporation in London dockland and the vesting orders that accompany them will enable the Secretary of State for the Environment to impose his will—or, as my right hon. Friend the Member for Widnes (Mr. Oakes) said, direct rule—upon a large area of dockland and upon the 45,000 to 50,000 people who live there.
The views of the people concerned deserve at least a mention in the House, particularly when we are regaled with speeches from so many people with such expert knowledge of dockland as have managed to intervene in the debate so far. The people in the area do not want this corporation. Their views have never been invited on the

proposal. Furthermore, the proposal is objected to vigorously by the elected local authorities in the area—all. including the GLC, that until recently had a very different political complexion from what they have today.
No serious argument has been adduced as to the alleged advantages of imposing a development corporation at this stage. On the contrary, the Minister gave a grudging recognition of what the Docklands Joint Committee has accomplished during the three of four years since it published its plan—only in the summer of 1976. I was glad to welcome that plan and broadly to endorse it.
People should not be intoxicated by the idea of a development corporation. There is nothing new in that. In the early 1970s there were five alternative proposals for new towns, varying in their exotic features from safari parks on the Isle of Dogs to God knows what. They were considered by the then Secretary of State for the Environment—the right hon. and learned Member for Hexham (Mr. Rippon)—but wisely he turned them down in 1973. He set up the DJC, which was a coming together of the local authorities, with a pooling of their powers. They drew up a master plan for the development of dockland in the interests of their boroughs and people.
When I launched the new inner city programme in 1977 I considered the possibility of a development corporation. I found nothing in the ideas and proposals that would be embodied in a development corporation to be attractive or in any way preferable to the partnership arrangement that we sought to create. We accepted that there was a need for reinforcement by the Government through an active partnership with the local authorities in the area.
I have nothing against new town corporations. We heard some rather misleading comments about the nature of new towns when the Secretary of State intervened a few moments ago. Green field new town sites have been the normal experience of post-war Britain. It is not a new experience. We all know that third-generation new, towns were largely built where there was already substantial and thriving communities—for example, Peterborough and Northampton—but when new town or development corporations have been established where a strongly established community already exists prior arrangements and agreements have been worked out between the local authorities about the development corporation and the part that they would play in it. In each case there has been the most searching and thorough public examination of the planning proposals. That is a very different position from what we have today in Docklands. There has been no such agreement between the local authorities and the proposed development corporation. Nor has there been any public inquiry to precede its establishment.
I cannot share the Minister's view that we have had anything other than a perfunctory examination of the problems and needs of the area through the agency of the Select Committee in another place. The UDC has been imposed. The decision to impose it without the agreement of the local authorities—indeed, against their expressed wishes—bears the hallmark of the present administration at the Department of the Environment—a mixture of appalling arrogance and ignorance. I cannot find—nor can the people of my area—any significant addition of funds for the benefit of the area. All too obviously, the boroughs that the Docklands area contain are suffering major cuts in Government provision for their housing programmes and local services. My borough of Tower Hamlets is faced


with demands that it should cut its expenditure by £6 million this year—helping, indeed, the regeneration of the inner city areas of the East End!
The great bulk of the £65 million—at least £50 million—is earmarked for the compulsory acquisition of land. That includes land that has been and is being developed by the local authorities. Once obtained, the land will be resold to whatever private interests find it profitable to buy it. The local council has planned to build 1,500 new houses in the area of the London dock that is in my constituency. It is an area where houses are in short supply and where flats are a dominant feature of housing accommodation. The council planned to build houses for the local people. That prospect will be lost to my constituents. It may be opened to others with rather larger purses in other parts of London.
Against that background an appalling start has been made to a major enterprise. In spite of my forebodings, I hope that benefits will accrue to the Docklands area. I wish far more strongly than some who have no connection with the area to see the area thrive and prosper. The UDC will be aware from the start that it is living on borrowed time and that it will be judged severely by those who are directly affected by its activities and by the Labour Party nationally.
I cannot say much more about the future. However, it cannot be more than about two and a half years before we have another general election. That is not a long time for a new corporation to win friends in the area. It will need those friends. It can be certain that a Labour Government will ensure that the elected representatives of the people of dockland are once again able to make decisions about the area. That is their democratic right, and it will be denied them only temporarily tonight.

Mr. Neil Thorne: I believe that I am one of a small number of hon. Members who have served as a member of the Docklands Joint Committee. When appointed, I had recently completed a period of service as the chairman of the central area board of the Greater London Council, during which period it purchased St. Katherines Dock from the Port of London Authority, offered it by open competition for development on a long building lease at an initial ground rent of 10 per cent. of the purchase price, and successfully let it, all within a record time of 10 months. I therefore approached the challenge of membership of the Joint Committee with enthusiasm and great hopes, but was sadly disappointed.
My experience was that the democratically elected members were there to represent their electors and not the area as a whole. As a consequence, consideration of the planning issues was closely bound up with the rateable value to be achieved by the recipient authority. It seemed to me then, and it certainly seems now, that it is vital that this area should be taken over by a development corporation. It is a crying shame that there are vast areas of underused land there, and it is essential that they should be brought forward for productive use for industry, commerce and housing in both the private and housing association sectors as soon as possible. There are wonderful opportunities for development, particularly in

satisfying the substantial and continuing demand for low-cost private housing. There is no doubt in my mind that the only efficient way of achieving that objective is by the creation of a development corporation.
My right hon. Friend is very fortunate to have found a dynamic chairman and an experienced vice-chairman of the highest integrity. From my experience, I strongly welcome the creation of a development corporation and fully support my right hon. Friend's proposals, which I believe are long overdue.

Mr. Robert Mellish: I have been in the House for 35 years and this may be the last time that I shall speak in this august place. I am fond of it and its traditions, and everything about it means a great deal to me. If I left the House I should it miss it very much.
I have been waiting for what has seemed decades to make this speech. As the Minister for Local Government and Environmental Services rightly said, it was announced long ago that Mr. Broakes had been appointed the chairman of the proposed development corporation and that I had been offered the vice-chairmanship. Throughout that time I have been in the shadow position without any real authority, and sometimes without any real money, either.
We have been waiting for this measure for a long time. It is imperative that we turn back the clock a little to find out how the situation occurred and how London dockland became derelict. Like most stories of this kind, it has a fascinating history. I have lived with it. I am a dockland Member of Parliament and I can talk with some authority. If we look back, we see that the tragedy of the dockland story is part of the story of the last war. History says that militarily we won that war. We did. Britain and her allies defeated the Germans and all that they stood for. However, economically that last war was a disaster for our nation in many respects.
The dockland illustration is a good one because, in the early part of the war in particular, the Germans came across and heavily bombed the area, which I know and love dearly. Although thousands of civilians were killed, the damage done to our dockland was infinitesimal compared to what happened later to the German docklands, when our war effort finally got under way and Bomber Harris went over there night after night with 1,000 bombers. He flattened the whole of the German dockland area. There was not a crane or quay that even resembled part of the docks. Then the war ended. We were victorious. Like many others, I came rushing out of the Army, and I wanted Utopia.
What happened? British industry got under way as best it could and started to redevelop. What did we start with in the dockland area? I shall take my area of Bermondsey as an example. I married a girl just around the corner, in the church alongside, so I know the Hays Wharf area fairly well. That area started up again. There was water—the wonderful River Thames—a tiny quay, some old-fashioned warehouses and Tooley Street. There was the congestion, the trouble and the difficulties. That is a typical example of the dockland that we inherited. That was all right in 1945, 1946, 1947 and 1948. I shall take the story forward.
The Germans had lost the war. There is no doubt that they suffered a great deal. However, they then received Marshall aid. They learnt how to work hard. They worked


night and day and they rebuilt the docks. What sort of docks did they build? That is the competition that we have to face in London. What docks they are. There was the river, of course, tremendous quays and warehousing and railway sidings. We could not compete. The Port of London Authority was fighting for its life year after year during that advance, and then came that awful word "containerisation." Cargoes were loaded into huge containers and dumped into ships.
We saw the decline of dockland. That history is important to put on record. The decline occurred because of the change of the economic climate, against which Britain has had to fight since 1945. It is a tragic story. The area in which I was born and bred, in which thousands of men were employed, suddenly folded up, and there was no more work
The PLA had invested millions of pounds at the other end of the river, in the Tilbury area. That was where the work was to be. It is unfair to say that the phrase "development corporation" has never been mentioned before. I used it in the House over 10 years ago, when dockland first started to become derelict. I begged the House to set up a development corporation with its own planning powers and special finance from Government to develop the docks as a whole. I said nostalgically—and I say and mean it today—that that was the one chance that we have had since the Great Fire that devastated London. Since those days there has never been such a chance as the dereliction of the docks has now produced. I wanted a development corporation to do that which our forefathers had failed to do in 1666.
Christopher Wren produced the most marvellous plans. If only they had been implemented. But, of course, they were not. They were discarded and ignored, and treated with contempt. Only the Churches took them up. The great St. Paul's Cathedral was built. I should think that it has paid for itself many times over since then. A few other things were done. Industry was allowed to do what it liked. It went alongside the river, and housing followed it.
Then came the Industrial Revolution, at the turn of the century. My father was born into that as an 1889 docker, and so was I. Let no man in this House say that he has a special affection for dockland over and above mine. I, too, have a feeling for what ought to be done in dockland. How can it be done? I argued for a development corporation. I wanted the wider body; I wanted the powers; I wanted the money; and I wanted to develop dockland as a whole. I wanted to do something that I thought we might never again get the chance to do.
When I put forward that argument it was welcomed by Tower Hamlets, it was welcomed by Southwark, and everyone said that it was a fine idea. I had a very good press. I even had a letter from the Prime Minister of the day, the right hon. Member for Bexley (Mr. Heath). Old Ted wrote to me out of the blue and said that I had made a first-class speech. He added that he had requested the Secretary of State—now the right hon. Member for Worcester (Mr. Walker)—to contact me and see what could be done. What happened? It was decided to set up a committee of inquiry—the oldest game in the world, if the idea is to get nothing done. It lasted for about three years. As my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) rightly said, one of the schemes was to have a safari park. So that committee was dumped, and it was after that that the right hon. and learned Member for Hexham (Mr. Rippon) established the Docklands Joint

Committee. That is the history. To say that the development corporation has never been mentioned before is untrue.
The Docklands Joint Committee started with five members, not three—Lewisham and Greenwich were represented as well. I have always paid tribute to the Docklands Joint Committee for what it earnestly and honestly tried to do within the limitations of its powers and finance. But it could not purchase the land that it wanted. Its finances were in grave difficulty. If any hon. Member wants proof of this he can ask the boroughs. They had a great number of schemes, which they could not implement because of the lack of finance.
Then, one day, I had a telephone call. The Secretary of State for the Environment, who is certainly no personal friend of mine—telephoned and told me that it was his intention to set up a development corporation. I could hardly believe my ears. He said "I want you to be its vice-chairman. I am appointing Mr. Broackes as chairman." I was very disappointed that I was not asked to be the chairman. I had never heard of Mr. Broackes, and I knew nothing of his firm. But in the last 15 months I have worked with this man and I put it on record that they do not come any better. This is a man of honour and integrity, who in taking on the job has debarred his firm from even tendering for a single job that may arise in Docklands.

Mr. Spearing: While he is chairman.

Mr. Mellish: I do not even try to convince my hon. Friend. It is a waste of time, because he is so bigoted and prejudiced. Mr. Broackes took on the job because he shared my concern as to how best to rejuvenate London and all that it represents. He was offered the task of chairman and I have taken on the vice-chairmanship.
I am no political fool. I knew from the beginning that I would be subjected to a great deal of personal animosity. I became fed up with hearing the remark, "Fancy linking up with the Secretary of State for the Environment." I do not know what sort of person some people think I am. Do they believe that I wish to spend all my time building great office blocks or £180,000 houses for people from Richmond and Chelsea? Do they believe that I shall ignore every borough council and that I shall treat everyone in London with contempt? If they believe that, they do not know me.
I took the job as vice-chairman for one reason alone. It was not to satisfy the Secretary of State for the Environment. My simple philosophy throughout life has been that if one wants to do something, one should get in and do it. I am not simply a resolution-passer. Too many people in this country are prepared simply to pass resolutions. I know them at local level. They can pass resolutions like a flash. To pass a resolution in support of £500 a week for the workers is no problem. It is finding the money that is the problem. I wanted to become involved to make sure that I would be part of the decisions taken by the development corporation of tomorrow.
It has taken weeks, months and what almost seems like years to come to this decision. We learnt that the proposals were hybrid, and, as the House knows—I hope hon. Members will understand that I wish to get this on the record, as I expect parts of my speech to be quoted—they were put before their Lordships. At almost 50 meetings, each lasting between two and a half and three hours, their Lordships heard arguments for and against the development corporation.
The boroughs put up a brilliant case. Their lawyers were extremely good. The borough council officers who gave evidence impressed their Lordships. The community groups who gave evidence were also heard with great patience. I should like to express my deep appreciation of the manner in which their Lordships conducted the hearings. No one could have been more careful, courteous or considerate. I have never known, in all my experience, a case given so much attention and detailed examination by independent people.
At the end of the day, their Lordships—they included a Labour peer, a Liberal peer and Conservative peers—decided unanimously to recommend that the London Docklands Development Corporation should be established. I think that it will be agreed that I am in good company. The proposal cannot be all that bad. I have listened to the debate today in the other place, where their Lordships have asked the development corporation for specific assurances about collaboration with the boroughs.
I understand the view of the boroughs. They see this foreign, alien body from outer space—this is what we are supposed to be—taking over their land, having special powers and receiving special money, and ignoring them and treating them with contempt. This is land that they have been elected to control. I understand their fears, as their Lordships understand them. Again, today, their Lordships stated that they wished to emphasise the importance of collaboration with the boroughs.
This is not a question of talk; it is a question of action. It is our intention, as I know it is the Secretary of State's intention, to invite the three London boroughs to supply membership of the board and to join the board. Whatever is done, they will be part of the decision-making. I do not know what more can be done to achieve representation for the boroughs. If my right hon. Friend the Member for Stepney and Poplar and my hon. Friend the Member for Newham, South (Mr. Spearing) say that they will not accept this foreign, alien body from outer space, I would reply that the responsibility lies with those who refuse to allow such representation. We shall make that offer emphatically and clearly. We want them to be involved in the role of policy makers.
Their Lordships touched on another point. A number of schemes have been promoted and organised—the money has not been found—by the boroughs and for which the borough council officers have been responsible. Their Lordships said that where there are such schemes—I am thinking of the Lysander scheme for Surrey Docks, a £200 million project, in the preparation of which the borough council officers have been involved, in conjunction with the promoters—the development corporation must cooperate with the borough officers. I give a solemn assurance that we shall, of course, do that. Does anyone think that we would ignore the borough officers who work that hard? But I ask that they co-operate with our board. We shall give them the facilities and do all that we possibly can to help them.
We intend to have a full liaison with the borough council officers. We want representatives of the councils on the development corporation. I cannot imagine what more we can do to show our good will and intentions. I do not want to do anything in Tower Hamlets, for example, that the electorate there does not want us to do.
The next break point is, I do not deny, a problem. The community groups appeared before their Lordships to put their points of view. There are nearly 100 community groups. I am all for discussion. I am a good democrat, I hope. But there is a limit to how far that can be pushed. The great danger of democracy is that people will spend all their time in discussion and end up doing nothing. I have seen that happen in this House. We are anxious to establish a central body associated or partly associated with us so that, through our board meetings, it can discover what we are doing. That body—let us call it the forum—will have overall responsibility for receiving the views of the community.
If, as a development corporation, we take action without understanding that there may be objections by certain individuals, we shall be heading for trouble. What sort of arrogance is it thought that we possess to go ahead with schemes that the local people bitterly oppose? We must therefore devise a machine to ensure that the community groups can make their views known to us. Where practical, we should discuss them. But I put it clearly on the record—I know that this part of my speech will be read—that I will not spend all my time in the development corporation doing nothing but talk to individual groups.
I could give countless examples of schemes that have been promoted. One of them took over four years to produce, but still there are community groups who are opposed to it, in spite of one public meeting after another. There is a limit to how much democracy can take. I am my own man in this case. I can go just so far. We shall provide the facilities for individual community groups to make their views known to what I call the forum and it will in turn advise us.
I have taken so much time——

Mr. Steen: Carry on.

Mr. Mellish: I am not sure whether the Minister wants to wind up.
I wish to deal with housing. The chairman of the development corporation, as he will be if the motions are passed—he will be in action from tomorrow morning—is most anxious for me to be involved in the provision of housing. It should come as no surprise to many people that I am a firm believer in a property-owning democracy. I do not know why members of my party are not as enthusiastic about it as I am. I live in a dockland area. I hold my surgeries there every week. I fail to understand why it is not abundantly clear to my right hon. and hon. Friends that people are crying out for the chance to own their homes. I live in an area where about 80 per cent. of the properties are council-owned. It is even worse in the area of my right hon. Friend the Member for Stepney and Poplar. There the figure is about 85 per cent.
I am sick to death of looking at council flats. In retrospect it is clear that the councils did a first-class job. They cleared filthy slums. There was no alternative then. I fight for and defend my borough council's housing record in clearing the slums and giving people decent homes. But the dockland area is all virgin land—housing gain land. I want people's homes to be built there. I want colour and gaiety—at low cost. The first priority for those homes should go to those who live in council flats now and who, for the first time in their lives, have the chance to get out, and to those who are on the waiting list.
I warn those of my right hon. and hon. Friends who are smart-alec on this that they had better be careful or they will be killed in the crush of people wanting to buy their homes. They should not forget that in London particularly there is a pent-up desire.
We talk in terms of attracting industry. One of the greatest attractions to industry is for it to be told that if it comes into the dockland area a number of homes can and will be made available for purchase by its skilled workers. Is not that common sense? I say that this is what we have to do and I am certain that we shall be given the chance to do it. We have met the house builders, who are desperately keen to back us up, because, as has been said, there is so much slack in the construction industry that it cannot wait to get going.
There are areas in dockland where, unless we, as a development corporation, do the regeneration—clear the sites, build the houses, create some sort of activity; the village atmosphere, the shops, the church, the lot—we shall not attract industry. Once we bring an area like that to life we shall attract the industry. That is our purpose. I want to do that in consultation with the boroughs, with the community groups, and in a way that will earn the respect and the credit of most of our people. That is why I took on the job of vice-chairman of this body. That is why, for a year and three months, I have had nothing but scorn and, sometimes, some rather despicable things said to me. But, hearing in mind the sources from which these things came, I do not much care. People are judged not by what they say but by what they do, and, in my case, where they come from.
I say to those in London who have the chance to read my speech "Do you really believe that Bob Mellish is the type of person whose only concern is speculation of the worst kind? Do you really believe that he will put up the type of housing that is out of reach of the Londoner, and that will destroy London?" There are not many who believe that—certainly not in my constituency. I ask for no more—and speak for my chairman, I know—than that we should be judged on merit. My right hon. Friend the Member for Widnes (Mr. Oakes) talks of a period of 18 months to two years. We shall need that, I dare say, and a lot more. We ask to he judged on merit.
Of course, I am a Londoner; of course I get emotional. I want to build a London of which not only I but my children and their children can be proud.

The Minister for Local Government and Environmental Services (Mr. Tom King): The right hon. Member for Bermondsey (Mr. Mellish) began his remarks by saying that this might be the last time that he would speak in this House. I think that I speak for all Members, certainly those of us who have had the privilege of listening to his speech tonight, when I say that we hope not. We have had our political differences, but nobody could doubt the sincerity and integrity with which that speech was made.
If I were one of the right hon. Gentleman's constituents I should have no doubt that the decision that he has taken to accept the appointment initially as shadow deputy chairman of the corporation, which, subject to the will of the House tonight, will be confirmed tomorrow, was taken in the interests of his constituents, in the interests of

Docklands and in the interests of London as a whole. I pay my personal tribute to the very moving speech that we have just had the privilege to hear.
The right hon. Gentleman's speech set in context some of the remarks that we heard from other Opposition Members. We understand why certain people have their political imperatives, which require them to make certain prepresentations to the House, but no other hon. Member can say that he has represented the area under discussion tonight for 35 years with distinction in a number of positions which the right hon. Gentleman has had the honour to hold in the Labour Party and in Government and has at all times been anxious to fight for the interests of his constituents.
The right hon. Member for Bermondsey has taken the view, which I make no apology for sharing, that the action that we are taking tonight is genuinely in the best interests of the people of Docklands and of the wider community of London as well. I was told by the right hon. Member for Stepney and Poplar (Mr. Shore) that I had expressed a grudging approval of the work done by the Docklands Joint Committee. I had hoped that it was a fairly generous tribute. I meant it to be so. Certainly, it was very much more generous than the tributes paid by my hon. Friend the Member for Ilford, South (Mr. Thorne), who served on that committee, or by the hon. Member for Woolwich, East (Mr. Cartwright), who also served on it, and who was much more critical of the frustrations and difficulties faced in trying to get development in London.
To say, as the right hon. Member for Stepney and Poplar did, that there had been a perfunctory examination of these proposals seems to me an unbelievable comment to make on their Lordships and their Select Committee, on which Members of all parties—Labour, Liberal. and Conservative—with an independent Chairman served for no fewer than 46 days scrutinising this proposal. I should like to know how many hon. Members of this House have scrutinised a single proposal for 46 days. To call that a perfunctory examination is an amazing distortion of the English language.
The right hon. Gentleman caught me out in one respect, however, for which I am grateful to him. I should like to express my appreciation to their Lordships for the scrupulous way in which they examined the proposals and for the way in which they took evidence and gave an opportunity for all the groups who wished to be heard and to enter petitions to be heard. To have the nerve to say that that peculiar procedure, whereby a Select Committee allows a place to everybody—not just organised groups, but even one individual who decided to come from Docklands and had the opportunity to have her views heard by five of their Lordships, presided over by a High Court judge—did not provide the opportunity for the views of local people to be heard was a disgrace. It was a very full procedure. Indeed, I have been attacked for the time that it has taken for this measure to be brought forward.
There is a danger in the loss of time. I hope that that time will now rapidly be made up. Certainly the Government will give every support that they can in this procedure.
I conclude with a comment from the report of the Select Committee:
Docklands does not form a single homogeneous community…What links together the very different areas…is the fact that they are all suffering from the same calamity—the closure of the docks and the disappearance of dock-related industry…the Committee…were forcefully struck by the extent of


that calamity and what a vast faces anybody seeking to regenerate the area." —

It being one and a half hours after the commencement of proceedings on the motion,Mr. DEPUTY SPEAKER put the Questions, pursuant to Standing Order No. 3(Exempted Business).

The House divided: Ayes 117, Noes 55.

Division No. 242]
[11.44 pm


AYES


Alexander, Richard
Le Marchant, Spencer


Baker, Nicholas (N Dorset)
Lloyd, Peter (Fareham)


Beaumont-Dark, Anthony
Loveridge, John


Benyon, Thomas (A'don)
Lyell, Nicholas


Berry, Hon Anthony
Macfarlane, Neil


Best, Keith
MacKay, John (Argyll)


Bevan, David Gilroy
Major, John


Biggs-Davison, John
Marlow, Tony


Blackburn, John
Mather, Carol


Boscawen, Hon Robert
Maude, Rt Hon Sir Angus


Bottomley, Peter (W'wich W)
Mellish, Rt Hon Robert


Bowden, Andrew
Mellor, David


Boyson, Dr Rhodes
Mills, Iain (Meriden)


Braine, Sir Bernard
Miscampbell, Norman


Brinton, Tim
Moate, Roger


Brooke, Hon Peter
Morgan, Geraint


Browne, John (Winchester)
Morrison, Hon C. (Devizes)


Buck, Antony
Murphy, Christopher


Cadbury, Jocelyn
Neale, Gerrard


Carlisle, John (Luton West)
Needham, Richard


Carlisle, Kenneth (Lincoln)
Nelson, Anthony


Chalker, Mrs. Lynda
Newton, Tony


Chapman, Sydney
Onslow, Cranley


Clarke, Kenneth (Rushcliffe)
Osborn, John


Colvin, Michael
Page, John (Harrow, West)


Cope, John
Page, Richard (SW Herts)


Costain, Sir Albert
Patten, John (Oxford)


Cranborne, Viscount
Pattie, Geoffrey


Dorrell, Stephen
Proctor, K. Harvey


Dover, Denshore
Renton, Tim


Dunn, Robert (Dartford)
Rhodes James, Robert


Durant, Tony
Roberts, M. (Cardiff NW)


Eggar, Tim
Rossi, Hugh


Faith, Mrs Sheila
Sainsbury, Hon Timothy


Fenner, Mrs Peggy
Shaw, Giles (Pudsey)


Finsberg, Geoffrey
Shaw, Michael (Scarborough)


Fletcher-Cooke, Sir Charles
Shelton, William (Streatham)


Forman, Nigel
Shepherd, Colin (Hereford)


Fraser, Rt Hon Sir Hugh
Skeet, T. H. H.


Garel-Jones, Tristan
Speed, Keith


Gow, Ian
Speller, Tony


Griffiths, Peter Portsm'th N)
Spicer, Jim (West Dorset)


Gummer, John Selwyn
Squire, Robin


Hampson, Dr Keith
Stanbrook, Ivor


Hawksley, Warren
Stanley, John


Heddle, John
Steen, Anthony


Hogg, Hon Douglas (Gr'th'm)
Stevens, Martin


Hordern, Peter
Stradling Thomas, J.


Hunt, John (Ravensbourne)
Tebbit, Norman


Hurd, Hon Douglas
Thompson, Donald


Jopling, Rt Hon Michael
Thorne, Neil (Ilford South)


Kershaw, Anthony
Waddington, David


King, Rt Hon Tom
Wakeham, John


Knight, Mrs Jill
Waldegrave, Hon William





Waller, Gary
Winterton, Nicholas


Warren, Kenneth
Wolfson, Mark


Watson, John



Wells, Bowen
Tellers for the Ayes:


Wheeler, John
Lord James Douglas-Hamilton


Wickenden, Keith
and Mr. Alastair Goodlad.




NOES


Barnett, Guy (Greenwich)
Lamond, James


Beith, A. J.
Leighton, Ronald


Bennett, Andrew (St'kp't N)
McKay, Allen (Penistone)


Booth, Rt Hon Albert
MacKenzie, Rt Hon Gregor


Brown, Ronald W. (H'ckn'y S)
McNamara, Kevin


Callaghan, Jim (Midd't'n &amp; P)
Marks, Kenneth


Campbell-Savours, Dale
Marshall, Jim (Leicester S)


Cocks, Rt Hon M. (B'stol S)
Newens, Stanley


Concannon, Rt Hon J. D.
Oakes, Rt Hon Gordon


Cowans, Harry
Palmer, Arthur


Cryer, Bob
Penhaligon, David


Cunliffe, Lawrence
Powell, Raymond (Ogmore)


Dalyell, Tam
Prescott, John


Davis, Clinton (Hackney C)
Race, Reg


Davis, T. (B'ham, Stechf'd)
Richardson, Jo


Deakins, Eric
Robinson, G. (Coventry NW)


Dean, Joseph (Leeds West)
Rooker, J. W.


Dixon, Donald
Shore, Rt Hon Peter


Dobson, Frank
Silkin, Rt Hon J. (Deptford)


Dormand, Jack
Silkin, Rt Hon S. C. (Dulwich)


Dubs, Alfred
Skinner, Dennis


Duffy, A. E. P.
Soley, Clive


Eastham, Ken
Spearing, Nigel


Ellis, R. (NE D'bysh're)
Steel, Rt Hon David


Harrison, Rt Hon Walter
Welsh, Michael


Haynes, Frank



Holland, S. (L'b'th, Vauxh'll)
Tellers for the Noes:


Hooley, Frank
Mr. James Tinn and


Johnston, Russell (Inverness)
Mr. George Morton


Kaufman, Rt Hon Gerald

Questions accordingly agreed to

Resolved,
That the London Docklands Development Corporation (Area and Constitution) Order 1980, a copy of which was laid before this House on 27 November, be approved.

LOCAL GOVERNMENT

Resolved,
That the London Docklands Development Corporation (Area and Constitution) (Amendment) Order 1981, a copy of which was laid before this House on 18 June, be approved.—[Mr. King.]

URBAN DEVELOPMENT

Resolved,
That the London Docklands Development Corporation (Vesting of Land) (Port of London Authority) Order 1981, a copy of which was laid before this House on 9 April, be approved.—[Mr. King.]

URBAN DEVELOPMENT

Resolved,
That the London Docklands Development Corporation (Vesting of Land) (Port of London Authority) Order 1981, a copy of which was laid before this House on 9 April, be approved.—[Mr. King.]

Agricultural Land

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boscawen.]

Mr. Nicholas Baker: I am grateful for the opportunity to draw to the attention of this full House the serious way in which the fundamental nature of the United Kingdom is being changed. The change is taking place without any consideration in the House, without any deliberate decisions to that end being taken by Ministers or local authorities, and without any notice being taken of the change. If asked about it I am sure that the majority of people would deplore the change.
If it were allowed to continue, the changed state of our country would be lamented by all. I expect that future Governments would drive parliamentary draftsmen to concoct batteries of laws to reverse the process. They would, of course, be too late. The damage would have been done.
I refer to the continuing loss of agricultural land in the United Kingdom. It has been disappearing at an alarming rate. No one living in the county of Dorset could be unaware of the pressures upon farmers to increase production from their land, of the pressures upon nature and wildlife, and of the continuing movement of people from urban to rural areas to live and to work. That is marked this week by the 1981 census returns. There is increasing conflict between those who work and those who would enjoy oar countryside. The cost of such pressures is the disappearance of our countryside itself and the steady and irreversible loss of agricultural land.
I therefore tabled a parliamentary question. The reply was disturbing. I was told:
precise figures are not available.
We are talking of the disappearance of the major ingredient of our precious environment and yet neither my hon. Friend the Under-Secretary nor the Minister of Agriculture have precise figures.
I put it to my hon. Friend that the lack of information will not do. I urged the Minister to take steps to obtain and maintain an accurate account of our disappearing environment. Such figures as have been published suggest a picture that is alarming. In the reply I was told:
It is estimated…that in the five years to 1979 the average annual loss was about 100,000 acres, of which 30,000 acres a year were taken for urban development."—[Official Report, 4 March 1981; Vol. 1000, c. 143.]
That is a staggering figure. On that basis a chunk of agricultural land the size of Dorset disappears every six and a half years. If that continues our grandchildren will be lucky to see green fields, let alone walk around them.
I shall describe the effects of this process before putting forward some points for action. The loss, of course, directly affects agriculture itself. Our farmers are forced to use concentrated farming methods and to develop factory methods for food production. The shrinkage of the main natural asset, the land on which to farm, makes competition from larger and less heavily populated countries of the EEC and the United States fiercer year by year. The scarcity of land pushes the price higher, and the difficulties of financing and purchasing a valuable asset radically change the ability of small and, by international standards, efficient farmers to continue in business, much less to enter into farming from outside.
As a result, farmers are pressed to cultivate land that would not be so used in other Western industrial countries. The effect of that process is only too apparent on the nature and wildlife of our countryside. The need to maximise profitable cultivation to the last square inch is directly responsible for the loss of hedgerows, the use of chemicals to attack vermin and encourage crops, and the ploughing up of heathland and areas of importance in the natural life of the countryside.
In my constituency precious hedgerows have been lost, although we boast of a farm that has set a national example of how efficient farming and conservation can go hand in hand.
My hon. Friend hardly needs me to explain to him the pressures on our countryside to which the passage of the Wildlife and Countryside Bill bears witness. The Government have shown their concern for the countryside in introducing the Bill, and some important steps forward in protecting both wildlife and the countryside are embodied in it. It is also true that expectations on the part of conservationists have been aroused by the Bill—expectations that were in no one's power to satisfy without a massive injection of public finance. I do not seek to extend that debate now.
The disappearance of agricultural land has brought the farming community into direct conflict with the interests of those who enjoy the countryside. Now that each corner is harrowed and tilled into greater productivity, the old easy relationship between farmer and rambler has gone. Long wrangles over rights of way and footpaths are now commonplace. The fertilised countryside is not the peaceful area that it once was.
The countryside provides three-quarters of our food and a way of life for those who work on the land, but it is, or ought to be, the open and untramelled space that balances the congested environment of city life, in which 90 per cent. of the population live. Yet in the South of England—other than on the moors of the South-West—there is now no longer any countryside that could be described as wild and remote.
Given that there is a serious problem, I wish to put several matters to my hon. Friend. First, the Government's policies set out in the White Paper "Farming and the Nation" to protect agricultural land and to give high priority to protecting the countryside are excellent. However, I doubt that the Ministry of Agriculture, Fisheries and Food takes that matter as seriously as it should. The Ministry has a close and important responsibility to the farming community and for the production of food, but it should concern itself with the nature and quality of agriculture and of its prime raw material and capital base—itself.
There is more at stake. The Ministry should interest itself in the diminishing of our land base as well as the wild, rough and marginal land that is also disappearing.
Secondly, our planning will have to be more determined in its approach. The Secretary of State's strong words about the defence of green belt land are reassuring, but that line is not always held. As long as developers feel that eventually they will be able to develop green belt land they will buy and keep the land against the day when the local authority acts with too little faith, ministerial resolve gives way, and one more breach of the principle turns back the land in the face on oncoming concrete. I am not


arguing in favour of land management as an instrument of planning legislation. I am arguing for resolution and the will to defend our countryside.
I have already discussed with my hon. Friend the use of areas of outstanding natural beauty. As he knows, I am unimpressed by the added bureaucracy and toothless designation that attaches to that planning feature. I am more concerned that the 75 per cent. of the land area not covered by this or any similar designation may be undervalued, demoted or regarded as expendable by comparison. In other words, I feel that all agricultural land should be regarded as special for planning purposes.
Thirdly, we must see that development, both industrial and residential, takes place in future to a much greater degree within developed areas. No one looking at the wasted areas of Peckham, in South London, and the abysmal under-use and misuse of precious acres there and in too many parts of inner cities throughout the country, could seriously query that opportunities for housing, factories and offices in city centres and developed areas existed right in front of our eyes. For it is the despoliation of the inner city that ultimately promotes the disappearance of agricultural land.
I welcome the business enterprise zones of my right hon. and learned Friend the Chancellor of the Exchequer. I applaud the registers of wasted and unused land in cities, of my right hon. Friend the Secretary of State for the Environment. My right hon. Friend has announced already that there are no fewer than 15,000 acres of this wasted land in 27 sites. It is clear that the Government now realise the importance of regenerating inner city areas, and I welcome that. I hope, too, that the cult of the hypermarket in rural areas will receive no support from the Department.
Fourthly, I hope that the passion for more and larger roads is now abated. There is a good case for developing our rail system and encouraging it to unshackle itself from the overmanned, inefficient and uncompetitive past. Motorways and spaghetti junctions are the spoilers of agricultural land.
Fifthly, I should like to see the House take great cognisance of this important matter. It seems to me so often that, through weight and population, hon. Members speak as though Britain consisted already of cities, suburbs and parkland. This is not the case, and I dare to hope that it will never be. I have suggested before that Acts of Parliament and statutory instruments should show in their explanatory memoranda the numbers of acres of agricultural land or countryside likely to be recovered or lost— more likely—as a result of the provisions of the Bill or regulations. This is a small matter, but one way in which the Department could concentrate the. parliamentary mind upon the consequences of legislation brought before the House.
I am asking for a new attitude in the country as a whole towards the protection of agricultural land. I make no secret of the fact that I want to have my environmental cake and to eat it, too. We want a sophisticated and efficient economy, and we want to retain our priceless invironment. I applaud the decision of the Secretary of State about the Belvoir land. What we want means that our industry and commerce have to be more than normally efficient and more than usually productive.
I do not shrink from the conclusion that there is a price to be paid for restricting development and costs involved in saving agricultural land. I shall listen with interest to my hon. Friend the Under-Secretary of State.

Viscount Cranborne: rose——

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Has the hon. Member the permission of the Minister and of the hon. Member for Dorset, North (Mr. Baker)?

Viscount Cranborne: I have, Mr. Deputy Speaker.
I am grateful to my hon. Friend and neighbour, the hon. Member for Dorset, North (Mr. Baker) for a brief moment of the time allocated to him. The House owes him a great debt of gratitude for raising this important topic, and I hope that my hon. Friend the Under-Secretary of State will realise that there are many right hon. and hon. Members who feel strongly that my hon. Friend the Member for Dorset, North has raised a matter which has been far too much neglected in our debates over past years.
I look forward to the possibility of the Under-Secretary being able to give the House more specific figures about the derelict land lying within our developed areas up and down the country. My hon. Friend the Member for Dorset, North referred to a figure of 15,000 acres. I am informed that it is much greater than that.
My hon. Friend asked for a number of assurances. I hope that they will be forthcoming and that we shall be able to rely on the Government to apply the planning laws rigorously, so that we can expect those derelict acres to be developed before there is any further despoliation of land of the kind to which my hon. Friend drew attention.

The Under-Secretary of State for the Environment (Mr. Giles Shaw): I have no doubt that the matter raised by my hon. Friend the Member for Dorset, North (Mr. Baker), and endorsed by his neighbour, my hon. Friend the Member for Dorset, South (Viscount Cranborne), is of great importance. I hope to be able to persuade him that the Department in which I have the honour to serve takes a considerable interest in this problem and seeks to do its best to ensure that we are not just wholesale despoilers of what he rightly records as our natural and national heritage.
I take issue with my hon. Friend's opening remarks, in which he suggested that the landscape of the United Kingdom was being changed without anyone really being aware of the extent of the change. On reflection, he will recall that the degree to which the public are involved in the planning process means that the opportunity is given for examination, objection and counter-proposal. If it is any encouragement to my hon. Friend, I can tell him that those of us who work in the Department are well aware of the frequent lashings upon our backs by our colleagues and friends in the Ministry of Agriculture, Fisheries and Food.
My hon. Friend rightly asks what are the policies, figures and facts of the consumption of land for development. Our planning policy for agricultural land is clear. Our objective must be to guard against all unnecessary losses of agricultural land. First, we have to ensure that only the minimum amount of agricultural land is taken for development. The most effective way of doing that is to bring unused land in urban areas back into circulation. I have coined the phrase recently that we must


recycle our cities. That is what we are now embarked upon, so I can give my hon. Friend the assurance that he seeks.
The answer to the question put by my hon. Friend the Member for Dorset, South is that our estimate of derelict, waste or dormant land in urban areas is about 250,000 acres. That represents the target, the challenge. We shall see what we can do to respond to that challenge in the way that my hon. Friend wishes.
We must also make sure that the amount of land taken is no greater than is reasonably required to carry out to the proper standards the development that may be permitted. We should never take better quality agricultural land when land of lesser quality would he just as effective.
Those may be regarded as the right policies. However, we should remember that we live on a small land mass. Land is scarce, and we must avoid using it prodigally, without sufficient regard to the future. The loss of agricultural land can he placed in perspective. Over three-quarters of the land in the United Kingdom is in agricultural use, with nearly one-sixth in forestry, woodland or similar use. Less than one-tenth is urban land, and that includes the network of transport and small villages which, as both my hon. Friends suggested, are the sinews of rural life. We must remember that less than one-tenth of our land mass is in the urban areas.
I come to the statistics. My hon. Friend was rightly critical of us for failing to provide, in answer to his question on 8 March, as detailed an answer as he would have wished. However, there is some background to the matter that I hope that he will find of interest.
The most reliable source of information on the loss of agricultural land is the annual census conducted by Agriculture Departments. Even this is not considered reliable on a yearly basis, but averages over five years are thought to give reasonably accurate assessments.
Farmers return both the total amounts of land in agricultural use and the amounts of land disposed of for urban or other development. The first gives estimates of the overall net loss of land to agriculture. The second includes disposal of land for housing, roads, industry, mineral working and recreation and all the other uses to which my hon. Friend referred. The figures have been found to be reasonably consistent with other less regular sources of information.
Estimates of agricultural land going to forestry and private woodlands and of movements to and from Government land holdings in those industries are also available. Nevertheless, even when those changes are taken into account, there remains a residual figure of loss of land that cannot be accounted for at present. There are several explanations. There have been changes in the definition of agricultural land holdings included in the census, and the nature of the land uses farmers have been asked to include in their returns. Other explanations include the growth of uses such as temporary grazing for riding ponies—popularly known as "horseyculture"—and land which simply goes out of agricultural use, either because it is marginal—my hon. Friend rightly referred to that—or in anticipation of another use, possibly development.
My hon. Friend referred to the answer that I gave him in March. I said that the loss was about 100,000 acres, with 30,000 acres of that being taken for urban development. Forestry and private woodlands took about 50,000 acres, mainly on marginal agricultural land in

Scotland. and 20,000 acres were the residual not accounted for—not because we did not wish to find out about them but simply because the mechanisms that we employed could not pick up the loss of land.
I have the latest estimates for the five years up to 1980. My hon. Friend suggested that we were involved in a never-ending process of digestion of good agricultural land which somehow would eventually submerge what was left of the agriculture industry—of which he is so formidable a representative. The estimates show a similar pattern, with slight reductions in both the overall loss of agricultural land and in the land lost to urban development. I can give my hon. Friend some encouragement. Recent estimates seem to reflect a downward trend in the loss of agricultural land.
The average annual loss to urban development in the post-war period, following the introduction of the present town and country planning system, has been only 60 per cent. of that experienced before the war. I can illustrate that by reference to estimates in England and Wales, where the effect of the use of marginal land for forestry and woodland is less marked. The loss of agricultural land to urban development in England and Wales peaked in the post-war period in the five years between 1963 and 1968, when 45,000 acres were lost annually to urban development alone.
That compares with about 53,000 acres lost each year to agriculture for all purposes. Since that time the land lost to urban development has declined steadily, to an annual average loss of 40,000 acres in the five years up to 1976, and 23,000 acres in the five years up to 1980. The most recent single-year figures are well below that level, suggesting that the annual average loss over the five-year period can be expected to continue to fall. Those estimates indicate that the recent losses of agricultural land for urban development have been at their lowest level in the postwar period.
That is the background to the statistical performance. I accept that any loss of high quality agricultural land can be entertained only if the policies for it are fully argued and found to be persuasive. The absolute figure and the absolute take of land for development show a steady decline, which I hope will be encouraging to my hon. Friend.
The figures suggest that the town and country planning system may have had some success in dampening down some of the less essential demands on agricultural land. I am hound to say, however, that economic forces will also have played their part in reducing demand at the present time.
It would be unrealistic to think that we could put a stop to all losses of agricultural land. There is no possibility of meeting all our needs for new factories, new houses and other essential developments without taking some land from agriculture. The structure plans that we have put in hand in most areas set the pattern for the future use of land. I suggest that they are an important guide in setting out area by area the way in which land should be used and the purposes for which it should be used.
These plans include policies for landscape and nature conservation. My hon. Friend referred, for example, to areas of natural beauty where some restraint on development is expected. In England and Wales, 9 per cent., or about 3·5 million arcres, of the land surface is designated as national parks or areas of outstanding natural beauty—green belts cover a similar area—adding up to 28


per cent. of the total area. High-quality agricultural land in grades 1 and 2 account for 15 per cent. of England and Wales, or over 5 million acres. Grade 3 land, which is also afforded protection where lower quality land can reasonably be made available for development, is more extensive, for obvious reasons, covering about 40 per cent. of the area, or about 15 million acres. These figures provide the broad gradations of agricultural land and indicate how they relate to the total land mass taken for development.
General policies and plans, no matter how clear and firm, are not in themselves enough. My hon. Friend has rightly said that we need to see an attitude of mind that will seek to alter the view that land is available for the taking, whatever class of development might be involved. Many fundamental planning policies are now available and they themselves quite often potentially conflict with one another. For instance, planning is concerned with the conservation of habitats and protection from the pressure of agricultural use. My hon. Friend referred to agricultural practices such as the use of pesticides and the rooting up of hedgerows. Equally, there is a conflict between preserving good-quality agricultural land and the pressures of urban development. That must be conceded. There is also a conflict in terms of promoting industrial, commercial, housing and other development important to the economic and social life of the country, some of which must occur in rural areas, too.
These objectives cannot always be simultaneously achieved by any general rule. Each site is to some extent unique and each example of pressure on the use of a site is also unique. Therefore, each case has to be considered on its merits.
Most proposals for development are resolved locally without undue difficulty. I have already referred to the planning system, which is designed to bring out the arguments in favour of or against the development of certain parcels of land. There is no doubt that the Ministry of Agriculture, Fisheries and Food is extremely vigilant in observing the planning scene and in stating its case when it has the opportunity to do so. When the proposed development of agricultural land, or former agricultural land, of 10 acres or more is not in accordance with the provisions of a development plan, the local planning authority is obliged to seek the views of the Ministry of Agriculture and to take those views into account in reaching a decision.
Only the most difficult cases, presenting borderline judgments or clear conflicts between national and local interests, will be called in for the Secretary of State to determine. This filtering of cases, in which the Ministry of Agriculture is an active participant, is a particular

strength of our planning system. I commend the Ministry to my hon. Friends for its vigilance and for the degree to which it seeks to protect the loss of agricultural land, which so clearly concerns my hon. Friends.
The key to reducing the loss of agricultural land does not necessarily lie in putting further obstacles in the path of essential development. The key has to be in the effort to ensure that we use the land already in our urban areas more effectively. On that my hon. Friends and I clearly agree. I have already given my hon. Friend estimates of urban land which is waste. We do not need to have precise statistics to know that the amount available demands action. We have taken action at the root of the problem. As my hon. Friends know, urban development corporations have been established. Indeed, we were discussing one earlier this evening. We have also established enterprise zones and land registers. Land registers are one of the most potent weapons that we shall use.
The root of the problem with unused land in our cities is to ensure that it comes forward for development. We know that firms search locally for such sites before they are forced by a lack of suitable land to look elsewhere. Where suitable land has been put on the market it has been taken up. For example, land that has been made available in Birmingham and Liverpool has been successfully developed for private housing.
A first step towards getting unused or under-used sites into productive use is to identify them. That is why we have designated 33 districts in England as areas where registers of land of this sort are to be prepared and made public. I understand that 27 have already published their returns. The returns reveal 1,640 sites, representing 15,249 acres, as a start. However, this must be set against the background of 250,000 acres, which, as I said, is the total availability of land of this sort. A preliminary examination of the first land registers suggests that about one-third of this acreage is suitable for development. This is an encouraging start.
There is another element that my hon. Friends must accept, and that is that mineral working has a major claim upon agricultural land, and frequently that is a rural activity. It is important that where it is possible to do so the land that is taken should be restored to agricultural use. I trust that my hon. Friend will recall that the Town and Country Planning (Minerals) Bill, which received its Third Reading a fortnight ago, gives local authorities the power to impose new and existing—

The Question having been proposed after Ten o'clock on Wednesday evening, and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twenty-five minutes past Twelve o'clock.